Atlanta-based Rainforest, a startup that provides payment processing to software companies, announced Wednesday that it has raised $11.75 million in seed funding.
The round was led by Accel, with participation from other venture capital firms including Tech Square Ventures and Atlanta-based angel investor Jon Hallett. The round also includes financing from Silicon Valley Bank, which failed earlier this year but had its assets acquired by a North Carolina institution.
Rainforest was founded in early 2022 by Joshua Silver, a Georgia Tech alumnus who had previously built and then sold a health care payments company. Rainforest helps software companies improve their offerings to clients by allowing them to embed payment processing.
“Historically, software companies have had a really hard time finding partners who can bring both the technology, the banking relationships and handle all of the risk management and compliance obligations,” Silver told The Atlanta Journal-Constitution.
“So anytime as a consumer you’re paying a health care bill or buying something online or supporting your local mom-and-pop retailer, those are the types of companies we would work with to power payments for them behind the scenes,” he said.
Rainforest takes a small percentage of each transaction that it processes. Silver has so far been funding the company from that transaction fee revenue as well as some self-funding. The newly announced seed round is the first investment funding Silver and his team have raised. He plans to use the new cash to hire more employees, expand Rainforest to allow processing of alternative payment types and add lending and credit products to its current offerings.
Georgia is a global payments processing hub. Financial technology companies employ more than 40,000 people in the state, according to the American Transaction Processors Coalition, an industry trade group.
The Rainforest announcement comes less than a week after the startup won a pitch competition at Venture Atlanta, one of the largest venture conferences in the Southeast. The recognition at the conference did not come with funding, but Silver said his company has seen an uptick in customer interest and investors looking to participate in Rainforest’s next round of funding. He plans to start raising a Series A round later this year or in early 2024.
Currently, Rainforest has about two dozen employees and is headquartered at the Atlanta Tech Village, a networking and co-working space for the city’s founders. Silver decided to stay and build his companies in Atlanta after graduating from Tech because of the city’s ecosystem for startup founders.
“There’s a huge sense of camaraderie,” Silver said. “The talent pool is great and we’ve got all the all the right ingredients to make a very successful company here in Atlanta.”
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