A British international payments company which is one of many examples of digital payments platforms which have changed the way in which companies move money around the world has raised $18 million in a third round of fundraising for its U.S. expansion plan.
Currency Cloud’s latest fundraising doubles the amount raised previously and was led by technology investor Sapphire Ventures and also include Japan’s Rakuten FinTech Fund which is a subsidiary of Japanese electronic trading and financial giant Rakuten Inc(TYO:4755).
Existing investors, including Atlas Ventures and Notion Capital, have also increased their investments.
According to a report by the New York Times, Currency Cloud, launched in 2012, processes about $10 billion (£6.3 million) annually and that should rise to $1 billion a month by the end of the year, said Chief Executive Mike Laven.
UK online and mobile payments firms are attracting significant investment. Transferwise raised $58 million in January and Azimo last week raised $20 million, and while those particular firms facilitate easier means for retail customers to pay in other currencies, Currency Cloud provides technology for businesses to do so. It said it stands behind about 125 platforms and the average payment on its system is between $15,000 and $20,000.
According to Currency Cloud, the ethos behind the platform is that it is based on new technology that is more efficient and less error-prone than traditional ways of trading foreign exchange. Payments between accounts has been transformed in the digital banking age, but handling fees and unattractive foreign exchange rates or commission charges can add to costs.
“The existing system that goes through banks is expensive, it’s cumbersome, it’s full of friction and is complex, and there’s a lack of transparency. We think it’s worse for businesses than it is for individuals,” Mr. Laven explained to Reuters.
The company intends to use the extra funds to drive expansion in the United States, and to go some way toward meeting the cost of extra technology and state-by-state reporting and compliance requirements that come with that.
It expects to have a dozen staff working in New York by the end of the year from five now and about 100 people in London, up from about 70 currently.