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.


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 in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Apple Begins Rolling Out BNPL Platform Apple Pay Later

More than nine months after initially announcing plans to offer its own "buy now, pay later option, Apple has begun rolling out its new platform. With Apple Pay Later, customers will be able to finance purchases by paying them off over the course of six weeks. These short-term loans come with no fees or interest. Currently, the company is inviting certain (randomly selected) users to access the platform. Like with...

Credit-Building Tool StellarFi Raises $15 Million

A credit-building platform is adding to its coffers, announcing a fresh injection of funding. This week, StellarFi (previously known simply as Stellar) announced that it had closed a $15 million round. The Series A was led by Acrew Capital, while ATX Venture Partners, Trust Ventures, Dream Ventures, Interplay, Accomplice Ventures, Vera Equity, FJ Labs, Fiat Ventures, Gaingels, Kelmhurst, Oyster Funds, Hilltop Ventures, Permit Ventures, Kindergarten Ventures, J2 Capital, Socially Financed...

Rocket Companies Introduces Rocket Visa Card for Homebuyers

Rocket Companies — the parent company of Rocket Mortgage, Rocket Homes, Rocket Loans and Rocket Money — is now adding a branded credit card to the mix. This week, Rocket introduced the Rocket Visa Signature Card. Not only will the new offering integrate with Rocket Money but will allow cardholders to earn up to 5% back. With the Rocket Card, customers can earn 5 Rocket Rewards on every purchase they make....