Zepto raises $25m to fuel local and international growth
Real-time account-to-account merchant payments platform Zepto’s Series A funding round has attracted $25 million which will be used to drive domestic growth as well as its expansion into international markets, starting with New Zealand and then the United States.
The $25 million injection was made by venture capital fund AirTree Ventures and Decade Partners, which takes minority stakes in businesses it believes to have long term growth horizons.
Zepto CEO Chris Jewell says the funding will also be used to enhance the Byron Bay-founded fintech’s payment infrastructure, including building additional functionalities on top of the New Payments Platform’s (NPP) PayTo framework due to roll out mid this year, and to power a slew of strategic hires.
He notes that Zepto was built from the outset with global extensibility in mind.
“Zepto’s account-to-account payments platform is scheduled to be live in New Zealand before the end of June. There is strong demand for our Australian merchant customers wanting to enter the New Zealand market,” he says.
“Beyond New Zealand, Zepto is an active member of the US Faster Payments Council, the largest industry-led organisation for real-time payments in America. We are positioning a US offering to align with the launch of the US Federal Reserve’s instant payment rail (FedNow) which is scheduled for early 2023.”
Jewell says Zepto was the first non-bank fintech approved to connect directly to the NPP as a ‘Connected Institution’ and also the first Australian non-bank payments provider to become an Accredited Data Recipient [ADR] under the Australian Competition and Consumer Commission’s Consumer Data Right [CDR].
“Zepto now sits at a crossroads of open banking, real-time payments, changing consumer habits, rapidly evolving merchant capability and, importantly, a melting pot of opportunity,” says Jewell.
“We believe that open banking is more than just a secure connection to transactional data, it is an ideology that can deliver positive social outcomes for everyone. We believe that open banking (or open data more broadly) and payments go together like cheese and wine.”
According to Jewell, this is Zepto’s first funding round for the Byron Bay-founded company which has been bootstrapped up until now.
The investment follows a period of explosive growth for Zepto in which it demonstrated 10X year-on-year revenue growth for each of the past four financial years since 2018.
Zepto, formerly known as Split Payments, facilitates more than $4 billion in payment volume each month and serves hundreds of Australian businesses, including Binance Australia, Superhero, Novatti Group, Nimble, Powerpay, Till Payments, Bluestone, Rentbetter, Biz Pay and Get Blys.
The fintech says it is tracking to process more than $50 billion in payments in 2022 and has experienced more than 100 per cent growth in headcount year-on-year since January 2020YoY, growing its team to nearly 100 employees in March 2022.
The company is on track to double this again by the end of the year.
In late 2021, Zepto became both the first non-bank fintech approved to connect directly to the NPP as a “Connected Institution” and the first non-bank payments provider Accredited Data Recipient (ADR) under the Australian Competition and Consumer Commission’s Consumer Data Right (CDR).
Jewell says Zepto specialises in business payment solutions for merchants, enabling them to make, manage and receive payments by connecting them directly to their customers’ bank accounts.
Its merchant customers include lenders, trading and crypto platforms, proptech businesses, travel and tourism operators, third-party processors and utilities.
“Ultimately, Zepto provides cloud financial products that allow our merchants to build complex bank account to bank account payment flows in a seamless and simple fashion,” he says.
“Our merchants can choose and compose from our API-first product offerings which include real-time account to account disbursements (think merchants paying gig economy workers instantly post-shift), collections (merchants collecting subscriptions), receivables (merchants like crypto exchanges wanting real-time funding for customer wallets), open banking data access and insights, open banking powered identity and value store management (digital wallets).”