Israeli payments platform Melio triples valuation in new raise
Israeli payments platform Melio is raising capital at a valuation of $4 billion, in a round led by Thrive Capital, a venture capital firm owned by Joshua Kushner, Trend reports with reference to Globes.
Melio joined the unicorn club earlier this year when it raised $110 million at a valuation of $1.3 billion. The new investment round was revealed on technology news website The Information. The amount of the raise was not reported, but it is estimated to be in the hundreds of millions of dollars.
A look at the growth in the company's workforce gives a clear idea of the reason that the company needs to raise capital every six months. In order to meet the growth in demand for payments services in the US, Melio has to recruit more and more people in Israel, on terms that will give it an advantage in the tech employment market. According to LinkedIn, Melio's workforce has grown by nearly 80% in the past six months, and it now employs about 385 people in its offices in Tel Aviv and New York. Melio is currently opening a new branch in Denver, Colorado, a move that will bring it closer to the market of small businesses in the US Midwest and West, and that will result in the recruitment of 250 people.
Like many companies in business payment services, Melio has undergone rapid growth during the coronavirus pandemic, as small and mid-size businesses are compelled to find creative solutions for deferring and spreading payments, or to find much more flexible and liquid payment methods.
Melio, which was founded by Matan Bar, Ziv Paz, and Ilan Atias, enables businesses to pay suppliers directly from within the QuickBooks accounting software, which is popular among small businesses in the US. It does not collect a commission on transfers between bank accounts, but if a business wants to pay suppliers on credit, it is charged a 2.9% commission, and Melio transfers the money to the suppliers with its own check. Melio thus helps businesses pay on credit - that is with a payment that is not immediate but happens once a month - while it pays the suppliers by check, which many of them prefer since it does not involve a commission.
The current round brings Joshua Kushner and Thrice Capital into the club of investors in the Israeli unicorn. Other investors are Coatue, which led the previous round, Accel, Aleph, Bessemer Venture Partners, Corner Ventures, General Catalyst, Latitude, LocalGlobe, Salesforce and American Express Ventures. Before this round, Melio had raised a total of $256 million.
Melio has appointed Prashant Ghandi, who was formerly head of digital payments JP Morgan, as its Chief Business Officer. Ghandi will promote collaborations with financial institutions and software companies that provide financial services in order to make Melio's payments platform accessible to more small businesses in the US.
Melio said in a statement: "Our previous fund-raising round was in January, and we do not respond to market speculation."