It’s been a banner fall for financial technology startup Rainforest Pay Inc., which was founded in 2022 by Georgia Tech alum Joshua Silver.
Late last month, it won the early-stage company pitch contest at investor conference Venture Atlanta. It was also honored in the fintech category of the Atlanta Inno's Fire Awards.
Now, it’s closed its first funding round at $11.75 million. Prior to closing this round, Rainforest relied on self-funding, customer revenue and funds raised earlier in the current seed round, Silver said.
The nearly $12 million infusion to Rainforest is much larger than most fintech companies' seed-stage fundraising totals. According to an August PitchBook report by Rudy Yang, the median angel and seed deal value was $3 million in the second quarter of 2023.
Rainforest's raise is around the median deal size for late-stage venture capital rounds.
The seed round was led by Accel, a Palo Alto, California-based venture capital firm that previously bet on big names in technology, such as Meta Platforms Inc. (formerly Facebook), Slack Technologies LLC, and Dropbox Inc. It also picked up cash from Atlanta’s Tech Square Ventures as well as BoxGroup. Infinity Ventures, The Fintech Fund, Ardent Venture Partners and strategic angels also participated, according to a press release.
The round includes a $3.25 million venture debt facility from Silicon Valley Bank, which was acquired by North Carolina's First Citizens bank after its failure in March and says it's back to normal operations.
Rainforest's fintech innovation
Rainforest's product embeds into software platforms to allow those companies to accept and process payments with low coding requirements.
Silver said the startup is part of a shift toward embedded payment technology. Rainforest is Silver’s third startup. He also founded PatientCo, a health care payments platform, that was acquired by Waystar Technologies Inc. in 2021 for more than $450 million.
“[Payment] volume is shifting from legacy incumbent players, including banks and large-scale processors, to new entrants in the market,” Silver said.
That's backed up by a September report from PitchBook.
The technology is attractive because it helps companies drive brand loyalty, wrote PitchBook analysts Yang and James Ulan wrote leading them to conclude that "the future of payments is embedded."
Rainforest targets mid-market software platforms — those that handle between $50 million to $2 billion in payments per year — as customers.
The technology is easy for software platforms to embed into their own systems, Silver said. One client made the transition in two weeks. In addition, Rainforest takes on the risk and compliance burdens.
“It’s completely turnkey,” Silver said. “They get the best of both worlds: a completely white-labeled solution that looks and feels like their own. But they don't have to do any of the work.”
In exchange, Rainforest earns a small percentage of each transaction. Clients so far include transportation and logistic companies RoadSync and Rose Rocket and health care payment companies PayGround and Curae.
Fintech startup eyes growth path
Rainforest has 19 employees and is based in Atlanta Tech Village in Buckhead.
Silver plans to use the new funds to hire in sales and marketing and product and engineering. He aims to hire a combination of recent graduates and more experienced professionals.
Silver declined to say exactly how many employees Rainforest will hire but said he is planning for “pretty significant growth in the coming years.”
The company plans to stay at Atlanta Tech Village for the time being, Silver added. Some of Rainforest’s employees work remotely outside of Atlanta. The company makes it a point to bring the team together for on-site meetings every six to eight weeks.
A previous version of this story said Rainforest is Joshua Silver's second startup. It is his third.
