Phoenix announced that it has raised $30 million in new venture capital, bringing its total revenue to $133 million. The round comes 18 months after the company closed a $30 million extension for a $35 million Series B and a $3 million SPV led by LatinX and black investors.
The cash distribution is significantly less than the extended Series B total, but Phoenix has increased the participation of new investors in the round, meaning this is not an extension round thanks to its growth over the past six months.
New and existing backers The General Partnership (TheGP), Franklin Templeton, Akrow Capital, American Express Ventures, Bain Capital Ventures, Cap Table Alliance, Homebrew, Insight Partners, Inspeed Capital, Lightspeed Venture Partners, Precursor Ventures, PSP Growth and Vamos Ventures participated. In the last round of the company.
In a press release, Phoenix did not disclose the valuation — “for the current funding environment — while acknowledging that the capital was raised this summer and that it “occurred at an increased valuation.” TechCrunch reached out to Phoenix for further comment, but had not heard back at the time of writing.
The SaaS startup’s core business is helping software companies run their own payments through flexible software, though it has expanded to become a direct payment processor itself. The company is sitting next to companies like Strip, which is not hidden to compete.
A month after the startup raised a 2020 Series B in 2020 led by Sequoia, the venture capital firm walked away from the deal, reportedly returning a $21 million check to Phoenix along with a board seat, information rights and shares. . TC’s Connie Loizos reported at the time that Sequoia decided to pull back because Phoenix decided to compete directly with Stripe, one of their portfolio darlings.
In May of this year, Phoenix doubled down on competition with Stripe when it announced that its in-house platform would facilitate payments directly, something it has historically been unable to do as an API provider. The move to direct facilitation allowed him to serve smaller clients below the previous sweet spot with a transaction size of ~$50 million. It has also introduced an in-person payment facility for various types of businesses to accept credit card payments. As it often goes in fintech: the bigger, the better.
The two moves put Phoenix squarely on Stripe’s turf, though CEO and founder Richie Serna told TC’s Mary Ann Azevedo that Phoenix differs from Stripe in its focus on creating an open ecosystem. Cerna likens his company’s Android and Stripe to Apple, which has been aggressively trying to shut down its iOS platform.
“We were building technology that took three years in-house with dozens of engineers, tens of millions of dollars in technical R&D and investment, and we took that to several months to launch developer-friendly APIs. Monetize their fees,” he told TechCrunch in a May interview. It was our biggest major sacrifice. What we have done now is become a payment coordinator ourselves so that our clients can be up and running within days, not just the payment, but also all the back office requirements and complete certifications. Over months.”
In a press release announcing the new funding, the company said Q2 2022 was the best quarter in terms of new deals closed. It’s welcome news in a quarter that saw mixed messages for fintech. So apparently Phoenix’s change in strategy has made enough of a difference to get a cadre of investors to put money into the venture-backed company.