Payments API Platform Sila Raises $7.7 Million in Funding
Despite FinTech deals falling to multi-year lows amid the global COVID-19 crisis, funding is still flowing for some firms. The latest to reveal new rounds is the Portland-based payments startup Sila.
Last week Sila announced that it had raised $7.7 million in seed funding. The round was co-led by both Madrona Venture Group and Oregon Venture Fund. 99 Tartans, Mucker Capital, Transferwise co-founder Taavet Kinrikus, and entrepreneur Jerry Neumann also participated. According to the company, the funds will be used to help develop new features for the platform and expand its reach. Meanwhile, as part of the deal, Hope Cochran of the Madrona Venture Group and Rick Holt of Oregon Venture Fund will join Sila’s board of directors while Matt Compton (also of Oregon Venture Fund) will become a Board Observer.
Incidentally the seed round comes almost exactly one year after Sila launched its Infrastructure-as-a-Service product. With just 10 lines of code, apps can add the ability for users to connect bank accounts, make transfers, and more. Sila’s banking and payments API is made possible in a few different ways — the first of which is a number of partnerships with companies such as Plaid (which was recently acquired by Visa). Also working behind the scenes of Sila is their SILA stablecoin. This token is available on the Ethereum public blockchain and is pegged to the U.S. penny, with funds held in FDIC-insured accounts.
Speaking to the need for Sila, the company’s co-founder and CEO Shamir Karkal said in a statement, “The global financial system is broken – despite the global payments industry being $1.9 trillion in revenue, it doesn’t serve consumers, small businesses, or the innovators trying to reach them. It is too expensive, inefficient, tightly regulated, and difficult to integrate into FinTech applications. This kills FinTech innovation at a time when we need it more than ever. Despite money being effectively digital for decades, the world of finance has still not truly been disrupted by the Internet.” He went on to say, ” The global financial system isn’t controlled by PayPal or Stripe, but by 30,000 global banks that still run on outdated payment systems like ACH. Our mission is to unite all the payment systems in one programmable layer to spur the next phase of financial innovation.” Additionally Oregon Venture Fund lead investor (and now Sila board member) Rick Holt spoke highly of Sila and its purpose, noting, “Shamir and his co-founders bring a strong and diverse background in online commerce, FinTech, investment banking, risk management, legal and even nuclear power to tackle the largest market opportunity in the world – finance. So far we’ve only scratched the surface of the financial ecosystem as a whole, as every company that touches payments or transfers money, in any way, will need FinTech integrations.”
As mentioned at the top, although 2020 started out looking like a promising year for FinTech, the coronavirus pandemic has certainly started to derail things. That’s why it’s encouraging to see some deals still getting done despite the current conditions. Moreover it’s also worth pointing out that, while there’s been a greater emphasis on late-stage deals, Sila is the latest in a string on early-stage deals to be announced. Hopefully this is something we continue to see more of throughout this trying year and beyond.