Tilled Inc. raised $11 million in its Series A funding round as it plans to take on payment processors dominating the small-business market.
The Boulder company raised the all-equity round from 19 investors, according to a disclosure to the U.S. Securities and Exchange Commission on Thursday.
Tilled is developing a platform for companies seeking to become “payment facilitators,” or a middle-man between a buyer and seller. Banks and credit card companies have traditionally operated in this space before tech upstarts like Square Inc. (NYSE: SQ) built platforms that provided faster integration.
Currently, payment facilitators fall into two categories. One is “managed facilitators” that take care of all the operational requirements for their merchants such as monitoring for fraud and settlements closing correctly, but with strict rules on how much revenue their merchants can gain from facilitating the sale. The other category is “PayFac-In-A-Box,” or a service that allows enterprise-size companies to build their own payments systems and keep more revenue but at the cost of having to do its own compliance.
Tilled believes its system will allow the best of both models, giving software companies a larger and more stable revenue stream from processing payments without having to deduct as much in costs.
“Companies shouldn’t have to choose between modern technology and competitive economics when it comes to choosing the right payment processing partner,” Tilled CEO Caleb Avery said in a statement.
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