Volante lands $35m, its first capital raise in two decades
Volante, a New York-based payment-as-a-service (PaaS) fintech, has decided to raise outside capital for the first time in nearly 20 years.
Profitable for the majority of this period, Volante wants to turbocharge its offering, customer base and geographical presence.
The cloud provider landed $35 million in a funding round led by Wavecrest, a Boston-based investor. The round also saw strategic participation from a string of heavyweights including Visa Ventures, Poste Italiane – Italy’s main postal service provider, Citi Ventures, and BNY Mellon.
Growth in the payments industry
The global PaaS market was valued at $6.2 billion in 2019. But it’s expected to grow at a compound annual growth rate (CAGR) of 16.9% from 2020 to 2027.
The wider global payments industry is also continuing to grow steadily. It brought in revenues of $1.9 trillion in 2018, according to McKinsey & Company, marking a sustainable growth level of 6%.
Global transaction banking made up roughly half of this figure. Whilst Asia-Pacific – particularly China – dominated the revenue pool with a whopping $605 billion contribution.
This is $100 billion more than the US contributed the same year.
Where will the capital go?
Volante says it will invest its fresh capital in its existing payments as a service product suite. This suite offers US wire, real-time and SEPA instant payment capabilities.
The fintech also plans to grow its client base, with a particular focus on growing its market presence in the Asia-Pacific region. This is a move other cloud providers such as Thought Machine are making.
Volante is looking at new markets for its payment as a service too. Whilst its more than 100-client list is rather bank-heavy, it wants to look at segments such as credit unions, and lines of business.
Wavecrest’s co-founder and managing partner, Vaibhav Nalwaya, says Volante “has built an impeccable reputation as a fintech” to “quickly enter and dominate new markets”.
“Shortly after launching their Volante Designer financial messaging platform, they became providers to some of the world’s largest custodians and exchanges,” he adds.
“Two years after entering the payments arena with VolPay, they processed the first US real-time payment.”