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Atlanta-based Rainforest has had a strong first year in business.
The platform landed its first customers earlier this year and went on to win the “early-stage category” at Venture Atlanta’s pitch competition in September. It also closed an impressive $11.75 million seed funding round from a mix of local and national investors while growing the team to over 20 people.
That growth comes from the fact that Rainforest is solving a really big problem within the software space. Specifically, it is making it possible for software companies to get into embedded payments.
Embedded payments, the process by which consumers can complete their transactions without having to leave a website or app, is something that is a well-known part of the fintech landscape. But traditionally, those embedded payments options haven’t been tailored to the specific needs of software companies, says Rainforest founder and CEO Joshua Silver.
Silver realized that there was a “growing base of software platforms that wanted to add payments and other financial services” but they lacked a streamlined option to make that possible.
“Software platforms historically have been faced with disjointed signup processes and poor economics. On the service side, if an end customer had questions or problems with payments, you had a lot of finger pointing between the payment provider and the software company,” Silver told Hypepotamus. “[Software companies] are looking for companies like Rainforest that can bring all the technology, all of the banking relationships, money movement, and all the core essence of payments, but also can bring with them the compliance and the risk management. And that’s what Rainforest does.”
Growing In The PayFac Space
There were just a few major payment processing companies like Global Payments and Fiserv in the past. But that changed when credit card networks allowed payment facilitators (PayFac) like Rainforest to enter the market, thereby creating more competition and broadening access to payment processing for SMBs.
“That allows our customers to really have a turnkey experience because we’ve done all the hard work of registering with the card brands. We’re the regulated entity, we’ve put up reserves, and we’ve put together a compliance program…which are all the things that make it really hard for software platforms to excel at payment processing. We’ve already done that on their behalf.”
That value proposition caught the attention of investors earlier this year. The team landed a $11.75 million seed round, which was a mix of VC and venture debt. Accel, Infinity Ventures, BoxGroup, The Fintech Fund, Tech Square Ventures, Ardent Venture Partners, and “a number of strategic angels” joined the round, according to a company statement.
Before launching Rainforest, Silver built his career in both the payments and software space. Within the startup world he was most recently the co-founder of Patientco, an Atlanta-based fintech in the healthcare space that was acquired by Waystar in 2021.