UK fintech GoCardless raises €77.5M to fuel open banking strategy; here’s everything you need to know

London-based GoCardless claims to be a leading player in recurring payments. This fintech startup has raised $95M (approx €77.5M) in its Series F round of funding.

The round was led by Bain Capital Ventures to fuel open banking strategy, accelerating the delivery of next-generation bank-to-bank payments.

The startup raised this funding after witnessing 46 per cent year-on-year growth, despite the pandemic. It brings the total raised amount to-date to $240M (approx €196M).

Use of the raised capital

The raised funds will be used by GoCardless to accelerate its open banking strategy and combine its latest technology with a global bank debit network.

The company claims that, for the first time, merchants will be able to access the best of both worlds for recurring payments:

• Instant open banking payments will provide visibility and speed
• Bank debit will maximise cash flow and minimise churn by pulling funds automatically from payers – all at a lower cost than cards

The company will also expand its offering into the e-commerce market to launch a simple and secure way of making bank-to-bank payments as a lower-cost alternative to cards.

About GoCardless

Founded in 2011 by Hiroki Takeuchi, Matt Robinson, and Tom Blomfield, GoCardless is a global payments network and technology platform that claims to take the pain out of getting paid for more than 55,000 businesses globally, including multinational corporations to small businesses.

The company is headquartered in the UK, with additional offices in Australia, France, Germany, and the United States.

Working towards simplifying the recurring payment process

GoCardless caters to businesses of all sizes – from multinational corporations like Docusign to fast-growing SaaS businesses like 8×8, and the rising subscription economy including Brompton Bike Hire and Bridgestone’s MOBOX. 

The company processes more than $18B (approx €14.69B) of payments annually across more than 30 countries. In 2020, during the pandemic, the company claims to have a strong performance with an increase in new bookings of 100 per cent.

Additionally, GoCardless has expanded its technology offering with “Success+”, a payments intelligence tool powered by machine learning, to help businesses optimise their retry strategy when payments fail.

Hiroki Takeuchi, CEO, and co-founder of GoCardless, says, “We believe that open banking is set to disrupt the payment landscape by introducing new, simpler, and more secure ways of making bank-to-bank payments that will compete with traditional card networks. Our investment in open banking innovation will create a uniquely valuable payment offering – continuing to provide our customers with the best way to collect recurring payments.”

GoCardless’s Open Banking strategy

Open Banking is designed to open up banking data to provide consumers and businesses with access to better services that can save them time and money.

GoCardless’s investment in its open banking strategy aims to:

• Provide an end-to-end recurring payment solution for its merchants: first-time payments via bank debit can take on average two to three days to process, prompting merchants to use alternative methods such as cards for the first payment. Instant first payments will offer a lower-cost alternative to cards before the recurring collection continues via bank debit. 

• Expand into the adjacent e-commerce market: develop a unique bank-to-bank payment method for e-commerce payments made to merchants that customers use on a regular basis. This will provide an alternative to cards that will significantly lower transactions costs for merchants.

• Enable businesses to collect international payments: provide businesses of all sizes with global access to Open Banking / PSD2 and its equivalents around the world, all delivered into their existing bank accounts in local currency.

• Provide businesses with a complete open banking payment processing service, including features such as refunds, payment reconciliation and error handling.

• Open Banking, and its equivalents around the world, are designed to open up banking data to provide consumers and businesses with access to better services that can save them time and money.

Back in September, last year, GoCardless launched a US debit solution. In addition to it, the company also announced the opening of a US headquarters in San Francisco. Almost a month later, the fintech startup partnered with TransferWise to make it easier for businesses to collect recurring payments from overseas.