For growing software companies, finding the correct payment facilitation partner can be a moving target.
In the early stages, companies find themselves using an easy-to-implement solution like Stripe. But as they process more payments and begin to outgrow the available options, they are faced with a challenging decision.
Caleb Avery said software companies at this point were forced to either take on the painstaking and expensive process of building their own in-house solution, or work with an inferior product.
“There was a huge gap in the payfac market … between $50 million and $2 billion in processing volume, there wasn’t a great solution for these companies,” he said.
So, three years ago he went to work on a product to bridge that gap.
As he surveyed the industry, he found that implementation time was a huge inhibitor for companies looking at payment facilitation solutions. Giant companies could afford to task their development teams with building a payment product, but smaller startups couldn’t wait out the six month-process it often takes to get set up.
“From a technical perspective, we thought, can we get this down to a one-week implementation,” Avery said. “How can we solve this hurdle around making it easier and faster for these software companies to get set up.”
After nearly two years of work, Avery recently launched Boulder-based payfac-as-a-service startup Tilled.
Tilled offers the ease and service of Stripe, but instead of charging for the processing fees, they share the profits with their customers. When working with services like Stripe, companies are charged a standard fee of 2.9% and 30 cents per successful card charge.
Tilled’s customized solution allows its clients to operate like their own fully registered payfac, giving them the ability to monetize their payments and keep 66% of that revenue share.
In addition, Tilled doesn’t charge any monthly minimum fees or setup fees to begin service.
“We’re not having to convince these people to give us a bunch of money upfront, we’re saying come try us,” Avery said. “We’re aligning with them as partners to say, ‘we make money when you make money, and certainly not before.’”
Tilled is currently raising a seed funding round to further build out its product, with commitments already secured from investors including Abstract Ventures, Global Founders Capital and Peterson Ventures.
The company has nearly 10 full-time employees and hopes to grow its staff to 25 people by the end of 2021.
