Finix has been gradually eroding Stripe, which processes payments for millions of businesses, for years. However, the startup became a payment processor in 2023, similar to Stripe, after previously assisting companies in the establishment of their own internal payment systems. Finix is currently preparing for its most significant offensive against the fintech behemoth to date.
In a recent interview with TechCrunch, CEO and founder Richie Serna stated that the business’s transition to a payment processor was “hugely transformational” and was a primary factor in the $75 million fundraising effort that was announced recently. That is still a considerable distance from the customer base of Stripe, with whom Finix is in direct competition, at least according to Sequoia Capital. In 2020, the venture firm led Finix’s $35 million Series B round. However, it withdrew from the investment weeks later due to a conflict of interest with Stripe, which it also funded. Finix retained the funds; however, Sequoia was terminated as a backing entity. Finix intends to extend its operations into additional countries worldwide and augment its workforce beyond the current 130 employees with the new investment. The startup’s ultimate objective is to significantly disrupt the American payments system.
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Four years later, Serna asserts that the event was instrumental in establishing Finix as a prominent company and has not had an enduring impact on the company. In fact, Serna asserts that fintech companies such as Adyen, Finix, and Stripe have ample potential for expansion in the payments sector.
Acrew Capital and Leap Global and Lightspeed Venture Partners jointly lead the $75 million round. Citi Ventures, Tribeca Venture Partners, Homebrew, Insight Partners, Inspired Capital, and Cap Table Coalition are among the other investors in the round. Finix has now secured $208 million in total funding with this Series C, which is more than two years after the startup secured a $30 million tranche.
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“One thing that we kind of try to correct, in terms of the narrative, is this idea that Stripe owns the entire market. We live in Silicon Valley. Everybody sort of believes that,” said Serna. “And so Stripe only actually owns 6% of the US market, and less than 2% worldwide. So payments is still relatively fragmented, and probably about 91% of payments today still goes through systems that were built back in the ’80s and the ’90s,” he noted. When Serna founded Finix, he didn’t see it as a payments business, but instead as a “payments infrastructure” company. Now that’s changing.
Serna says Finix has quadrupled its revenue in the last year, though he declined to share its true number of merchants. However, he told TechCrunch in 2022 that Finix was supporting more than 12,000 merchants and says Finix closed more deals in 2024 than in the company’s entire history — so Finix could have more than 24,000 merchants today. In some ways, these companies are more similar today than when Sequoia abandoned its investment in Finix for being too competitive with Stripe. Both process payments for businesses, require little to no coding to get set up, and operate in Canada and the United States. However, Serna says Finix is specifically building products for businesses with both in-store and online footprints that don’t have the developers to build out those experiences. He says there are tens of millions of these companies in America. To this end, Finix offers more options for physical payments, integrating with several different payment devices.
Serna also says Finix offers more visibility into its pricing. Stripe takes a clean, but obscure, 2.9% cut of every transaction, plus a 30-cent fee. Finix, on the other hand, uses a cost-plus model, breaking down everything it’s charging a customer for and showing their markup.
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