Individuals may easily move money back and forth, and there are a variety of cash apps to select from. On the commercial side, though, sending $100,000 in the same manner is not as simple.
Paystand intends to change this. The Paystand Bank Network, which facilitates business-to-business payments with minimal fees, is powered by cloud technology and the Ethereum blockchain, and is based in Scotts Valley, California.
NewView Capital led a $50 million Series C round, with participation from SoftBank’s SB Opportunity Fund and King River Capital. Paystand co-founder and CEO Jeremy Almond stated that this takes the company’s total investment to $85 million.
Almond’s family lost their home during the 2008 economic recession. He returned to graduate school and wrote his thesis on how commercial banking could be improved and how digital transformation could be the solution.
Paystand performs for business transactions between mid-market and enterprise customers what Venmo does for consumers, Almond said, who derived his company vision from the enterprise side.
“Revenue is the lifeblood of a business, and money has become software, yet everything is in the cloud except for revenue,” he added.
He thinks that about half of all commercial payments are still made by paper check, whereas fintech relies primarily on cards with 2 percent to 3 percent transaction fees, which Almond believes is unsustainable when a company sends $100,000 bills on a regular basis. Paystand charges a monthly flat cost rather than a transaction fee.
Square and Stripe were among the first generation of consumer-facing startups that primarily concentrated on accounts payable and subsequently built business process tools on top of an existing infrastructure.
Paystand believes that the accounts receivables side of the business is more difficult, which is why there aren’t many competitors. This is why, according to Almond, Paystand is riding the next wave of fintech, fueled by blockchain and decentralized finance, to disrupt the $125 trillion B2B payment market by providing an autonomous, cashless, and feeless payment network as an alternative to cards.
Over the course of three years, customers who used Paystand saw average savings of 50% on receivables and $850,000 on transaction fees. In the last year, the company’s monthly network payment value has increased by 200 percent, and the number of clients has doubled.
The new cash will be used to expand the firm by investing in open infrastructure, the company said. Almond wants to rethink the entire CFO stack and reboot digital finance, starting with B2B payments.
“I’ve wanted something like this to exist for 20 years. Sometimes it is the unsexy areas that can have the biggest impacts,” Almond said
Jazmin Medina, a principal at NewView Capital, will join Paystand’s board as part of the transaction. While the venture firm is a generalist, she said that it is rooted in fintech and fintech infrastructure.
She also agrees with Almond that the B2B payments field is lacking in inventiveness and has “strong conviction” in what Almond is doing to help mid-market enterprises manage their cash needs more proactively.
“There is a wide blue ocean of the payment industry, and all of these companies have to be entirely digital to stay competitive,” Medina added. “There is a glaring hole if your revenue is holding you back because you are not digital. That is why the time is now.”