Political leader Stacey Abrams and Atlanta entrepreneur Lara O'Connor Hodgson wanted to make business-to-business payments as easy and fast as swiping a credit card. Now they have $9.5 million to grow that vision.
Financial technology startup Now Corp. allows businesses that work with other businesses to receive immediate payments while their clients can still choose to pay their invoices within a 30- to 90-day window. Now earns revenue from percentage fees.
Virgo Investment Group led the Series A round, with participation from Cresset Capital Partners. (Cresset Capital Partners is not affiliated with Chicago-headquartered private wealth manager Cresset Capital Management LLC and related companies, which was not a participant in the venture capital deal.)
Now is harnessing the business-to-business payments industry, which has previously been overlooked by the fintech market, said Hodgson, the startup's CEO.
“There’s a massive industry that Atlanta will own now, because we’re creating the epicenter of business-to-business payments,” said Hodgson, referencing the city's reputation as a fintech capital.
The product aims to help small businesses scale. Without immediate revenue, they can’t grow quickly or may have trouble paying employees because they don’t have the funds to do bi-monthly checks. With Now, Hodgson says small businesses have more opportunities.
Hodgson and Abrams experienced stalled growth because of late payments with their previous venture.
They founded spill-proof water bottle company Nourish in 2009, but late payments from other businesses made it difficult to grow, Hodgson said. If restaurants and retail brands were paid immediately through consumer credit card transactions, the same process could be applied to business-to-business transactions.
She likened Now’s innovation to the growth of national grocery store brands. Previously, stores managed their credit tabs for customers. When credit cards became popular, they could get paid immediately and use that cash to expand their stores.
"Small businesses are the engine of the economy,” Hodgson said. “They generate a large portion of jobs ... and are a source of a good bit of innovation.”
Now has 25 employees and five open positions. Hodgson says the company is looking for new office space in the south Buckhead area after her team spent a year working remotely.
Now has more than 350 active clients, mostly businesses relating to services, such as consulting or architectural firms. It also has a partnership with Coca-Cola to help the small businesses the beverage giant works with reach their revenue goals.
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