Plastiq Raises $75 Million For Stronger Pivot to Small Business Owners

Even in the midst of an unprecedented pandemic, it seems that deals are still getting done. This week Plastiq announced it had raised a whopping $75 million as part of its latest round. The Series D was led by B Capital Group, while existing investors Accomplice, Kleiner Perkins, Top Tier Capital Partners, and Khosla Ventures also participated. Previously the company saw a $27 million Series C in late 2018 and the FinTech has now raised $140 million to date.

Plastiq is perhaps best known among credit card points and miles enthusiasts as the service that makes it easier to use cards for rent and other expenses or even pay individuals. However, as TechCrunch notes, the company has also proven useful to small businesses at this time of uncertainty, allowing them to also rely on their credit in ways they might not typically be able to. In fact Plastiq says that business owners now account for 90% of their revenue. As a result the FinTech plans to introduce new payment-related features for businesses with the help of the newly-injected funds.

In terms of how Plastiq makes money, it currently charges users a fee equal to 2.5% of their transactions. While that might offset the rewards that some individual credit card users would earn from transactions, some have found the service to be worth it for trying to meet a minimum spend requirement for a sign-up bonus. That aspect might apply to small business owners as well, although Plastiq also notes other potential financial benefits, such as earning discounts from vendors for early payment, avoiding loans, and being able to write-off these transaction fees as business expenses.

Announcing the latest round and the company’s intention to help small businesses, Plastiq co-founder and CEO Eliot Buchanan said in a statement, “SMBs are the lifeblood of our economy, and in light of the economic uncertainty, now more than ever they will need innovative ways to maximize their working capital and protect cash reserves. We have also made a number of strategic industry hires that well-position Plastiq to rapidly scale as we continue our mission to champion the underserved SMB segment through this time of economic uncertainty.” He continued, “We will leverage this funding to equip SMBs with expanded payment options that enable them to efficiently maximize profits and cash reserves through the use of our intelligent, automated payments platform.” Meanwhile Karen Page of B Capital Group (which led the Series D round) echoed those sentiments, stating, “SMBs represent the largest business segment in our country but are chronically underserved when it comes to working capital. They drive almost half of economic activity and create nearly two-thirds of new jobs, yet SMBs can’t get access to the capital they need. Plastiq’s impressive growth shows they are filling a critical gap by bridging credit access and payables, and B Capital believes the company is positioned to become the leading working capital solution for small businesses.”

Despite starting out as a workaround for credit card gamers, Plastiq has proven to be a useful tool for small business owners. Therefore it almost seems appropriate that news of this large fundraising round comes as entrepreneurs across the country are dealing with an unprecedented cash crunch. All this makes Plastiq’s pivot to the B2B market seem like a wise move that will serve them well as they continue to expand.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Zilch Adds $50 Million to Latest Funding Round

Despite some reversals of fortune in FinTech as of late, a growing U.K.-based firm has announced an additional investment. Recently, Zilch announced that it had extended its round with an additional $50 million in funding. The added funds bring their Series C to a total of $160 million, while the company has now raised $460 million in equity and debt to date. The extended funding round comes on the heels...

Top 10 Personal Finance Articles of the Month — June 2022 

It’s time again for one of my favorite features here on Dyer News: a look at the top 10 personal finance articles of the month. To start, we'll take another look at financial independence and freedom. Then, with the housing market going a bit crazy lately, we'll feature a pair of articles on home buying. Lastly, we'll cover tips for one-income households, finance after death, fighting inflation, and more. As...

Bilt Rewards Launches Travel Portal with Benefits for Cardholders

Last year, the startup Bilt made a splash when it announced a new service that would reward users for paying their rent. That premise was then expanded upon with the launch of the Bilt Mastercard, which is issued by Wells Fargo. Now, continuing to capitalize on both the hype of their product and the demand for travel, Bilt has debuted another new offering for customers. This week, Bilt Rewards announced...