In May 2023, Finix CEO, Richie Serna told Payments Dive’s Caitlin Mullen that his payments company had “a plan of attack” to win market share in the payments industry. Today, Finix announced that it has raised an additional $75 million Series C from new and existing investors to continue enacting its plan.
Finix Rising
Finix is one of the few payments companies in the world that has a shot at joining the ranks of Adyen and Stripe as one of the digitally native vertical payment processors (DNVPs) stealing market share from legacy processors over the next decade.
Finix has always been committed to helping merchants with complex use cases. When I worked there1, we helped online platforms and vertical SaaS companies become payment facilitators (payfacs). Eventually, Finix became a payfac itself in order to help platforms launch more quickly. In May 2023, Finix announced it had gone even closer to the metal by becoming a payments processor in the US (just like Adyen and Stripe). This is a rare feat. By my count, there are only ~25 merchant processors registered in the US today (including Adyen, Fiserv, Global Payments, Stripe, and Worldpay)—Finix is one of them.
The company said it became a processor to offer customers “even more configurability, reliability,” and better pricing. “But being a processor has also allowed us to move much faster,” Richie shared in a LinkedIn post reflecting on the one year anniversary of the company becoming a processor. Of course the CEO would say that, but Finix’s momentum over the last 18 months speaks for itself:
Became a payments processor with direct connections into the major card networks
Expanded to Canada
Launched support for standalone merchants (vs. just software platforms)
Launched four major new products:
Finix Payouts
Recurring Billing
Low-Code/No-Code Tools
Automated Merchant Underwriting
Expanded its lineup of in-person payment devices multiple times
Finix hasn’t publicly shared revenue numbers but it has disclosed that it already processes “tens of billions of dollars for tens of thousands of merchants” each year. In a phone conversation, Richie shared with me that with its increased product velocity and control over its stack, Finix is signing more customers than it ever has before. Keep in mind the new volume the company is signing today will likely compound over time just as it did for Adyen and Stripe. It’s not hard to imagine a future (quite soon) where Finix is processing $100 billion/year or more.
Richie also told me that Finix is currently winning about 60% of the deals it sees and taking market share from other DNVPs and legacy processors alike. I can corroborate some of Richie’s claims about winning customers from other DNVPs. Since I left Finix, I’ve served as an adviser to a few startups and I was recently informed by a rapidly-growing vertical SaaS company that is planning to transition its payments volume from Stripe and Checkout to Finix because Finix was able to work with them on a more complex payments flow.
Finix’s plan of attack seems to be working.
The Case for Finix
Don’t get me wrong, Finix has its work cut out for it to reach Adyen/Stripe-scale (i.e., expanding to more international markets) but the bull case for Finix is fairly straightforward:
Merchants are being underserved by legacy processors. This creates an enormous opportunity within the global payment market
A new cohort of digitally native vertical payment processor (DNVP) is best set up to take advantage of that opportunity by serving merchants (digitally native or not) with unified platforms and rapid feature development
Adyen and Stripe are the only two clearly established members of this DNVP cohort. Braintree and Checkout will both likely be successful but each company is vulnerable in its own way:
PayPal’s recent partnerships with PSPs that compete with Braintree indicates that it may no longer favor Braintree with exclusive access to PayPal products, which could affect the platform’s growth. Braintree’s in-person payments offering is also relatively weak.
Checkout is still working off its crypto hangover, doesn’t have major clients in the US, and is the only major DNVP without an in-person payments solution
Finix is the only other DNVP with a shot of joining the cohort of companies that will come to define the future of global payments as legacy processors continue to decline. And it has a track record of doing exactly the type of difficult things that made Adyen and Stripe so successful.
Now, I won’t go all Ryan Breslow on you and say that there’s some conspiracy keeping investors from putting money into competitive payments companies but it is true there haven’t been many investments in early-stage payments companies in the US over the past decade. Finix has been one of few exceptions, raising $135 million from investors like American Express Ventures, Sequoia, Visa, and many others.
Now, with an additional $75 million raised from existing and new investors, Finix has even more fuel to keep up its product velocity, expand into new markets, and continue to win customers from legacy processors and DNVPs alike.
Further Reading
This piece fits nicely into my thesis about digitally native vertical payment processors (DNVPs).
I also recommend listening to Richie’s interview with Miguel Armaza of Gilgamesh Ventures from earlier this week:
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Disclaimer: The information contained in this piece is for educational and informational purposes only and should not be considered financial advice. Do your own research or seek professional advice before making any investment decisions.
I was an early employee/executive at Finix from 2018 to 2023.