The CEO of North Carolina-based Spreedly says the payments software startup is eyeing a push into Latin America after a $75 million fundraise

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The CEO of North Carolina-based Spreedly says the payments software startup is eyeing a push into Latin America after a $75 million fundraise

Justin Benson Spreedly CEO

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  • Spreedly, a North Carolina-based payments software startup, has announced a $75 million growth equity investment from Spectrum Equity.
  • Spreedly's API helps online merchants accept transactions from multiple payments providers, like Stripe and PayPal.
  • We talked to Spreedly's CEO, who said that the fresh funding will go toward two things: product enhancement, and international growth - particularly in Latin America.
  • Spreedly's last fundraise was in early 2016, led by E-Merge. Up to that point, it had raised a total of $6 million since it 2013, when it pivoted from a digital subscription processing service to its current broader payments platform.
  • Click here for more BI Prime stories.

Spreedly, a North Carolina-based payments software startup, announced a $75 million growth equity investment from Spectrum Equity - which has also invested in Grubhub and Survey Monkey - on Wednesday.

The startup works directly with online merchants, and Spreedly's API helps them accept transactions from multiple payments providers, like Stripe and PayPal.

Spreedly is a behind-the-scenes platform, so awareness has been a challenge, CEO Justin Benson told Business Insider.

"We sit in Durham, North Carolina, and I don't think anyone thinks there's anything exciting happening in payments here. So that can be a little bit of a headwind." he said.

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Spreedly's business model also keeps it under the radar.

"Raising a small amount of capital, there's no big splashy headline," Benson said. "We sit in a strange spot where we don't handle the money, so we don't have FX exposure, we're not routing funds, we're not a payment method."

"When a Visa, Mastercard, or the banks think about us, they just sort of scratch their heads. We're not a friend, we're not a foe, they don't know how to categorize us," said Benson.

To be sure, the fintech has set its sights far outside of Durham.

This fresh funding will go toward two things: product enhancement, and international growth, particularly in Latin America.

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Product enhancements will come with a focus on machine learning and AI, which Benson said is a move driven by customer feedback.

"Everyone's going to say machine learning and AI, they're overused catch phrases, but it's really that there are savvy payments professionals pushing us to do more," Benson said.

Benson is also pushing for opportunities in Latin America.

"It's such a high-growth area with a really disparate payments landscape and lots of small providers," Benson said.

Spreedly isn't the only startup eyeing opportunities in the region. Brazil's neobank Nubank has exploded, with more downloads than Monzo, Revolut, and N26 (three top European neobanks) combined. N26 announced ambitions to launch in Brazil earlier this year.

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One of Spreedly's early customers is SeatGeek, which started as a ticket search engine offering insight into venue seating charts, before it started selling its own tickets. SeatGeek used Spreedly to link into third-party ticket merchants.

Customers browsing seating charts on SeatGeek were able to purchase tickets from third-party providers within the SeatGeek app via Spreedly's payments platform which integrated the different ticket providers.

Benson attributed some of Spreedly's growth to a pattern of new startups hiring people from the likes of Uber and Airbnb to run their payments.

"Those people are coming from their own experience saying, 'no matter who you pick, there are always constraints, so the strategic thing to do from the get-go is to have this layer that allows us to work with multiple payment providers.'"

A startup may choose one provider like Stripe or Square, but there are geographical limitations, for example.

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"We've seen this positive uptick, where this current wave of new e-commerce and apps have people who are bringing the experience of building these things in-house. They know they can't afford to build them yet at a 50- or 100- person startup, so they would pull us to be that bridge," Benson said.

Spreedly's last fundraise was in early 2016, and was led by E-Merge. Up to that point, it raised a total of $6 million since it 2013, when it pivoted from a digital subscription processing service to its current broader payments platform.

"Some of our early investors have stuck around with us for a long time, and this is a liquidity event for them," said Benson.

Benson said Spreedly has been cash flow positive, but it has been reinvesting back into the business.

"We saw more opportunity primarily because the marketplace conditions are turning more favorable to us," Benson said. "I came to the conclusion that we were leaving some of that opportunity on the table by continuing to bootstrap and manage both for solid cash balance, plus being able to invest in the business and chase all these worthwhile opportunities."

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