Rainforest, a startup focused on integrating payment processing into other software platforms, has secured $20 million in Series A funding, following its seed financing announcement less than a year ago.
This rapid succession of funding rounds, more common in 2021, is notable in today’s environment. Rainforest’s impressive traction likely attracted new investor Matrix Partners, along with returning supporters Accel, Infinity Ventures, BoxGroup, The Fintech Fund, Tech Square Ventures, and Ardent Venture Partners. To date, the company has raised $31.75 million.
In the past six months, Rainforest reports a 17x increase in payment volume, with “dozens” of platforms across various industries adopting their services. The two-year-old Atlanta-based company also claims to have doubled its valuation but did not disclose specific figures.
CEO and founder Joshua Silver describes Rainforest as a payments-as-a-service provider helping software companies build and optimize embedded financial services. Silver asserts that Rainforest’s approach allows customers to increase revenue by 2x-5x through embedded finance, tailored specifically for SaaS companies.
Rainforest positions itself as a Stripe alternative, enabling software providers to manage payments from end customers to their business clients. For instance, a platform for residential roofing contractors can facilitate payments from homeowners to contractors. Rainforest distinguishes itself from competitors like FIS, Fiserv, and Stripe by being purpose-built for SaaS companies and offering premium service.
Silver, who previously founded and sold healthcare SaaS Patientco to Waystar, consulted with over 50 software platforms on payment strategies before starting Rainforest. He found existing embedded payment providers lacking and set out to create a better solution.
Rainforest captures volume as software platforms migrate from legacy processors like Fiserv and FIS, competing with companies like Stripe to embed financial services and payments. Silver emphasizes that Rainforest is designed specifically for software platforms, unlike large processors built for direct merchant processing.
Rainforest’s revenue model is consumption-based, with the company earning a small percentage of each transaction. Silver believes their transparent pricing and white-glove service are key to winning customers.
Recently, Rainforest secured CRM and marketing automation platform Keap as a major client, showcasing its capability to support large companies and compete with big-name rivals. Over time, Rainforest has expanded into verticals such as field services, professional services, healthcare, retail, and nonprofit.
On the product front, Rainforest has added support for Apple Pay, 3DS, and Plaid, aiming to increase payment adoption and reduce fraud. It’s one of the few payment providers using instant bank verification to speed up merchant onboarding.
The market for financial services embedded into e-commerce and software platforms was worth $2.6 trillion in 2021 and is projected to exceed $7 trillion by 2026. Silver sees immense potential in this market, with thousands of mid-market vertical SaaS platforms in the U.S. alone.
Looking forward, Rainforest plans to use its new capital to enhance its product and support services. Currently, it employs about two dozen people.
Matrix Partners’ Matt Brown highlights the shift of trillions in payment volume from traditional solutions to modern software platforms with embedded financial services, praising Rainforest’s unique approach.
Other players in the space include Forward, which enables SaaS companies to rent its offerings as a service, and Gynger, which provides embedded financing for technology vendors. Forward recently raised $20 million.
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