Finix raises $75 million to compete with Stripe as a payment processor.
For years, Finix has been slowly making progress in the competitive payments market, in which Stripe handles transactions for millions of businesses. However, after previously collaborating with various companies to establish...
Finix has been steadily working to compete with Stripe, a platform that processes payments for millions of businesses. In 2023, Finix took a significant step by officially becoming a payment processor, similar to Stripe, after previously helping various companies establish their own internal payment systems. The startup is now preparing to make its largest push against the fintech giant.
Richie Serna, CEO and founder of Finix, mentioned in a recent interview that becoming a payment processor has been "extremely transformative" for the company and has been a key factor in its recent fundraising of $75 million. Serna stated that the company has quadrupled its revenue in the past year, although he did not provide exact figures on the number of merchants it handles. However, in 2022, Serna mentioned that Finix supported over 12,000 merchants and suggested that, with more deals closed in 2024 than in its entire history, it could currently have over 24,000 merchants.
Despite this growth, they are still far from matching Stripe’s customer base. The venture capital firm Sequoia Capital led a $35 million Series B funding round for Finix in 2020 but withdrew shortly thereafter due to a conflict of interest related to its support for Stripe. Although Finix retained the funds, it lost Sequoia as an investor. Serna believes this episode helped raise Finix's visibility and did not have a lasting impact on its business. He also highlighted that there is room for fintech companies like Stripe, Finix, and Adyen to grow in the payments sector.
Serna also questioned the perception that Stripe dominates the market, noting that it controls only 6% of the U.S. market and less than 2% globally, indicating that the payments sector remains quite fragmented.
When addressing the differences between Finix and Stripe, Serna explained that initially, he did not see Finix as a payments company, but rather as a "payment infrastructure" company. However, this has changed. Both processors share some similarities, such as ease of setup and their operation in Canada and the U.S., but Finix focuses on creating products specifically for businesses operating both online and in physical stores, which do not have developers to implement those experiences.
Finix provides more options for in-person payments and integrates with various payment devices. It also offers greater transparency in its pricing structure. While Stripe charges a somewhat opaque fee of 2.9% plus 30 cents per transaction, Finix uses a cost-plus-margin model, itemizing all charges and showing the markup applied.
With the new investment, Finix plans to expand its team beyond the current 130 employees and enter more international markets, with the ambition of increasing its share in the U.S. payments system. The $75 million round was led by Acrew Capital, with participation from Leap Global and Lightspeed Venture Partners, among other investors. To date, Finix has raised a total of $208 million in funding, with this latest capital raise marking an increase in its valuation.