Accelerates growth for leader in the rapidly growing digital payments solutions market
Prepaid Technologies, a Birmingham, Ala.-based provider of prepaid digital payment solutions, announced raising $96 million in new growth financing. Edison Partners, the growth equity firm, led the transaction, and StepStone Group (which recently acquired venture capital platform Greenspring Associates) co-led. Stifel Venture Bank, a Division of Stifel Bank, and Top Tier Capital Partners also participated. The company will use the proceeds to accelerate its market expansion and continue to advance its category-leading technology payments platform and customer-focused prepaid solutions.
Analysts estimate $120 trillion in business payments are still check-based, and service providers are fragmented across multiple vendors for verticals such as payroll, rewards, purchasing and disbursement. These four opportunities alone represent $80 billion addressable markets, growing at more than 10% annually and accelerating with the proliferation of smartphones, e-commerce, and digitized payments since the pandemic’s onset. Prepaid Technologies enables its customers to access and customize B2B and B2C payments across these segments with a unified innovative fintech partner with a focus on the consumer and end user experience.
“Prepaid Technologies is making it easy for businesses to transform their outdated disbursement, payroll, and purchasing processes with real-time digital payments across niche categories where competitors don’t have the same level of depth or expertise,” said Jennifer Lee, Partner, Edison Partners, who co-led the investment.
“This is a unique product offering, where a company can access and customize different payment solutions in a one-stop shop. We’re impressed with Stephen Faust and the management team’s ability to remain capital-efficient while growing organically and profitably. We look forward to working with them as they execute on their vision,” added Lee. “Modern payroll and expense management for remote workforces continues to see strong traction through the last 18 months. B2B payments are also trending higher as companies opt for disbursement solutions that make it easier and safer to deliver corporate funds. These tailwinds bode particularly well for the company’s growth and provide a moat for adjunct product opportunities.”
Prepaid Technologies has seen over 15,000% straight-line growth in its load value. Revenue has increased 9x over five years since the company raised its only round of outside capital, $5 million in 2016 through Ballast Point Ventures. The company has delivered a clear product-market fit with 1,700 customers and 450 active partners including banks, payroll processors, payment providers, such as FIS, emergent fintechs including digital banking platforms, enterprise technology companies, marketing, health and wellness payments processors, and merchant services providers.
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Recent launches include the MyDashCard app and dashPerks, a cardholder cashback rewards program. Prepaid Technologies also enjoys strong retention metrics with notable blue-chip customers like Lowes, Taco Bell, Nissan, and Sony. The company is also seeing tremendous growth in its disbursements product which businesses use to pay their vendors electronically.
“We purpose-built our platform to create a turnkey way for companies to configure payments solutions across their enterprise however they operate. Clients access payments through our dashboard technology or integrate solutions into their workflows through our robust API suite. We’re laser-focused on productization and customization that will help to transition more companies to card-based and digital solutions. With this investment, and with Edison Partners’ expertise and experience, we can focus on investing in our current solutions, accelerating our industry footprint and expanding our suite of offerings to ensure our customers and partners achieve their goals,” said Stephen Faust, CEO, Prepaid Technologies.
“Loyalty payments and refund programs present an enormous niche opportunity. There is both a programmatic vertical opportunity and underserved community opportunity. Prepaid Technologies has an incredible load volume and data set, and the management team has deep banking and payments expertise, which we’re confident will bode well for the company’s continued growth and deliver value to customers and partners around the globe,” said Chris Sugden, Managing Partner, Edison Partners. Sugden will join the board of directors.
Recognized by LendIt Fintech as Fintech Equity Investor of the Year, Edison Partners has financed and guided more than 50 private fintech market leaders. The firm’s current active portfolio includes Bipsync, ComplySci, Fund That Flip, GAN Integrity, Giant Oak, GoHenry, Houwzer, MoneyLion, Nuula, Yieldstreet, and Zelis.
The investment in Prepaid Technologies is Edison Partners’ first investment in Alabama and is the firm’s third growth financing in an underserved market this year following investments in Boulder, Colorado-based The Pros Closet and Houston, Texas-based MacroFab.
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