A payments startup whose backend was originally built by the founder while still living with his parents and starting the business, today announces a massive fundraiser that catapults it as one of the startups most valuable in Europe. Mollie, an Amsterdam-based startup that allows businesses to integrate payments into sites, documents and other services through an API, today announces that it has raised 665 million euros ($ 800 million) valuates the company at 5.4 billion euros ($ 6.5 billion).
Blackstone Growth (BXG), Blackstone’s growth equity investing activity led the investment, also with the participation of EQT growth, General Atlantic, Capital IHM, Alkeon Capital, and TCV. TCV led Mollie S’s escapeseries B in September of last year.
Mollie has experienced a major growth tear in recent years. The company is currently on track to process some € 20 billion (nearly $ 24 billion) in payments in 2021, up 100% from the previous year when it processed around € 10 billion. It currently has 120,000 active merchants per month (compared to 100,000 in 2020) and its customers include Deliveroo, Unicef, Acer and Guess. It adds between 400 and 500 new customers every day.
Granted, the pandemic has seen a massive shift in commerce with all kinds of transactions – buying goods, paying for services, handling your banking and other finances – all moving into the digital world, and that has played out for Mollie as well.
But that’s not the whole story either: the growth at the same rate this year as last year seems to indicate that while we are starting to see more signs of the pandemic’s progress (well, at least for some…), the shift to paying and buying it online (and using Mollie’s rails to do it) will remain.
“The only thing you can reliably measure in payments is consumer spending. It was 10% and now it’s 15-20%, ”said Shane Happach, who took over from founder Adriaan Mol as CEO of Mollie in April of this year (who by the way was also the founder of MessageBird; Mol’s nickname is Mollie, hence the company name).
In an interview, Happach explained that consumer spending, and the addressable consumer market that follows, is the metric that best indicates how a business like Mollie will grow. So while Mollie has been largely profitable since its inception in 2004, the plan will now be to put gas on growth, by creating related services around payments to continue to expand its product offering while continuing to move into more geographic areas beyond its core business, and the largest market in Europe, helped in large part by its new major investors.
This will put him in a deeper competition with a whole bunch of players. That is to say, Mollie is far from the only payment company in the market, nor the only one that has experienced an economic boom in recent times. But it’s bigger and a lot more fragmented than you might think. Happach – who spent a decade at WorldPay before joining Mollie – points out that the top ten payments players hold 50% of the market, but the remaining 50% is held by around 5,000 players.
“Yesou would be really surprised, companies like Stripe are in the 5,000. They are not in the top ten, ”he said. (JP Morgan, WorldPay, Fiserv (First Data), PayPal are among the top ten.). Essentially, this gives the company plenty of opportunities for growth and consolidation, while also emphasizing how important the market is to everyone.
Stripe came back to our conversation a number of times, especially when we talk about competitive threats – its basic premise, like Mollie’s, has been building a payment platform (complex for any non-payment business). ) which can be integrated by customers anywhere via a simple API; when it comes to valuations (Stripe is now valued at $ 95 billion); and when it comes to product playbooks.
Either way, the main takeaway seems to be that Stripe’s success speaks to the market that Mollie has ahead of it. “We see a huge opportunity in the super underserved population of SMEs,” Happach said. “Especially if you look at our major markets, where most of our customers come from today, the financial services that they can access are very clumsy.” The company, he added, will focus on a few areas that it believes it can do better than what is currently available, which also complements its payments business: working capital for small businesses, card issuance and programs. corporate cards, expense management and merchant banking. (I must note in all the areas where Stripe has also launched products.)
It will also be interesting to see how and if Mollie, as he grows older, becomes more confident about potentially changing his cut. It took PayPal years, but it recently rebalanced its pricing. Happach notes that Mollie never did and has no plans to follow him.
However, one area where Mollie is less likely to invest new capital is in acquisitions.
“I come from a business that had acquired a bunch of other businesses, and I think there are pros and cons,” Happach said. “For Mollie, we are building a biological plan…. [Acquisitions are] always an opportunity, [but] I would say that is not the thesis of what we have agreed with the investors, it is the most likely things we would like to do…. I think right now we’re mainly focused on hiring as many great talent as possible, really strengthening our business and engineering product teams. Much remains to be done by simply investing in our own business, creating and training our own staff, and serving the clients we already have in the best possible way.
The business, indeed, hasn’t really grown on a sales force or big marketing investments, but largely through word of mouth so far, one of the reasons Blackstone has come to Knock on the door.
“One of the things that really impressed us about Blackstone is that of the hundreds of people who sign up for Mollie on a daily basis, 90-95% of them have virtually no interaction with Mollie directly,” Paul said. Morrissey, who heads the Blackstone investment. activities in Europe. “They just find Mollie, like the product and go and go and it comes down to a kind of unitary business economy… It talks about their competitive position in the market.”
This is somewhat due to the change, with the company embarking on a major hiring drive, bringing its team from 480 to just under 800 over the next nine months.