Flatpay raises $47 million targeting small merchants with simple payment solution

like the world is waiting $65 billion As payments technology giant Stripe goes public, a wave of smaller startups continues to flood the market to grab more payments business.As one of his latest developments, the Danish company flat payThe funding was led by Dawn Capital, which builds payment solutions for small and medium-sized brick-and-mortar businesses such as shops, restaurants, and salons, and raised €45 million ($47 million).

Flatpay had raised just under $21 million prior to this Series B, and with this new funding, its value is now well over $100 million. The company plans to use the funding to expand into new markets in Europe and develop more products alongside the POS and card terminals it currently sells. Sander Janca-Jensen, CEO of Flatpay, said that while AI may be embedded in some of these products, it is only an enabler of specific functionality rather than a core service. .

“We were able to raise money without mentioning AI buzzwords,” he said. “It seems to be rare these days.”

This €45 million is a strong Series B in the current market in Europe, especially considering the size of the startup. Founded in 2022, Flatpay currently has just 7,000 customers across Denmark, Finland and Germany.

Even though its revenue and customer base are both growing at 15% monthly, Flatpay’s business is just a drop in the merchant ocean.

There is Over 24 million SMEs in Europe; POS terminal within the area The number is over 17 millionThere are also hundreds of other payment services, including Stripe, Adyen, SumUp, and PayPal, as well as smaller players like SilkPay, all targeting the same customers as Flatpay.

But investors believe the startup has a lot of potential, even in the current economic climate, enough to make a strong early bet.

Janka Jensen, who co-founded the company with Rasmus Bask, Rasmus Helmund Carlsen and Peter Roos, said the gap Flatpay has identified in the market is that retailers looking for the convenience that technology can offer are more likely to He said it’s the lack of truly simple solutions that don’t require difficult solutions. We also consider aspects that come with it, such as troubleshooting, understanding the intricacies of pricing, and integrating the product into your business flow.

The startup’s approach to addressing that gap is done in three ways, he said. On the customer side, Flatpay targets customers of a defined size. Only sellers with an annual transaction value of more than 100,000 euros are allowed, and their customers cannot be multi-location chains or franchises. Janka Jensen said he regularly turns away customers if they don’t meet these conditions.

On the technology side, we matched our target customer size with the unit economics of our payment solution, with very basic flat fees of 0.99% for terminal transactions and 1.49% for POS purchases (hence the startup’s name). It was set. Therefore, Flatpay does not set a minimum fee for his single transaction, and there are also no fees if the customer pays with an international card. Janca-Jensen said the model means that while his Flatpay sometimes loses money on transactions, overall it lowers the barrier to adoption and helps increase spending and overall revenue for the company. I admitted that there was.

Perhaps most interestingly, on the sales side, despite its focus on streamlined technology, Flatpay only sells through live sales visits. We don’t have online sales (although we do have experts who can arrange in-person sales visits and handle support), we don’t have virtual visits, and we have no plans to introduce either.

Janka Jensen and her co-founders said they became interested in direct-to-field sales while selling home alarm systems in a previous life.

Just like payment hardware and software, security can be a hard sell for customers. Flatpay realized that the only way to ensure deals closed was to sell directly. And the only way a salesperson can sell directly is by understanding the product well. “You have to have salespeople understand the product well and explain the product well to buyers. This sets a high standard for how simple the product has to be. ” said Janka-Jensen. “We like the challenge.”

He said about half of Flatpay’s 200 employees work on the sales side, split between those who help organize sales calls and provide support, and those who visit customers directly. Typically, they are hired from other retail roles rather than software sales.

“We avoid SaaS account executives and fintech people,” he said. In his opinion, SaaS sales is so easy that people working in the field are “too lazy and complacent” to qualify for field sales.

So far, in the three markets where Flatpay operates, the aim has been to hire hyper-local salespeople who understand the nuances of each market. This seems to raise a lot of questions about how well this will scale over the long term, but Janka-Jensen puts those concerns aside and investors are bullish as well.

“The field sales model works when done well. It allows you to localize and deploy your team in a cost-effective way and explain why your product makes sense on a local basis,” says Dawn Capital, a fintech company. said General Partner Josh Bell.

He noted that iZettle, another Dawn-backed company, also pioneered the use of field sales to sell its flashy new technology to non-technical customers. “They were winners, but even they couldn’t do as well as Flatpay. The payouts are huge, but flatplay is only a small part of the opportunity.”

Denmark’s Seed Capital also participated in the round along with other unnamed investors.