Rainforest, an Atlanta-based payments processing startup, is eyeing significant growth after raising more than $30 million in less than a year.
The company announced Wednesday it had raised a $20 million Series A round. This is the second significant raise for Rainforest — last October, the company announced it had secured nearly $12 million in seed funding.
The company decided to raise more money shortly after the seed round to be able to take advantage of the demand they were starting to see, said Joshua Silver, CEO and founder of Rainforest.
“Truth be told, we still had plenty of capital left on the balance sheet from the seed round. We looked at it as an opportunity to accelerate building the product and accelerate our go-to market,” Silver told The Atlanta Journal-Constitution.
Silver, a Georgia Tech alumnus who had previously built and then sold a health care payments company, founded Rainforest in early 2022. His business helps software companies improve their offerings to clients by allowing them to embed payment processing.
The Series A round was led by San Francisco-based Matrix, a venture capital firm that has invested in startups like buy now, pay later platform Afterpay and customer service company Zendesk. Earlier investors in Rainforest, including Atlanta’s own Tech Square Ventures, also participated in the Series A.
Embedded payments
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.
Rainforest, an embedded payment processor, makes money when its clients make money. The company takes a percentage of all the transactions processed by software companies that integrate its platform.
“The tailwinds that are propelling a lot of our growth is historically, you bought software from software companies, and you bought payments from a bank or traditional payments processor,” Silver said.
But now, companies are selling both software and payments together, and they can embed Rainforest as that payment processor within their software.
It took just two months to raise the $20 million, Silver said, in what he admitted was a “challenging” environment for startups that didn’t have strong growth metrics like Rainforest.
North American startups fundraising increased slightly in the first three months of this year compared to the end of 2023, but investments were still down year-over-year, according to data firm Crunchbase.
The seed funding from last fall allowed the startup to finish building its platform and sign its first customers. It now has dozens of clients in various industries including logistics and health care that process millions of dollars per year.
Rainforest has about 24 employees, Silver said, and is headquartered at Atlanta Tech Village in Buckhead. Silver plans to hire more people and invest in sales, marketing, business development, customer experience and more with the $20 million Series A.
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