Meet Orlando's homegrown tech unicorn.
Stax, the Orlando-based financial technology company previously known as Fattmerchant, on March 8 announced it closed a $245 million investment round. The capital infusion not only will let Stax keep up its rapid growth, but it also puts the valuation of the company at $1 billion.
That makes Stax a “unicorn,” the term used for a private startup company worth $1 billion or more.
While 2021 was a record year for the number of U.S. firms that reached unicorn status, they’re still rare. There are 536 unicorns in the U.S. and only seven in Florida, according to CB Insights.
Fattmerchant is also Orlando’s only unicorn and the first Orlando-grown unicorn. Luminar Technologies Inc. was valued at more than $1 billion before it went public in December 2020. However, Luminar (Nasdaq: LAZR) was headquartered in Palo Alto, California, before it named its large Orlando facility its headquarters.
“We are just getting started,” Stax founder and CEO Suneera Madhani told Orlando Inno. “This is not an exit, just a fun stop.”
This investment round is all about fueling growth, Stax co-founder and President Sal Rehmetullah told Orlando Inno. “We wanted to figure out how to make Stax a household name domestically and internationally.”
Since it was founded in 2014, Stax’s payment processing technology has powered more than $23 billion in transactions for businesses. The company last year made a majority investment in Canadian billing management software firm Fusebill, and the influx of capital will enable Stax to further grow its international customer base, Madhani said. “A huge piece of this investment is to take us international.”
Investors in the round included Knoxville, Tennessee-based Greater Sum Ventures, which in 2020 made a majority investment in Stax, as well as Boston-based HarbourVest Partners and Frisco, Texas-based Blue Star Innovation Partners. Blue Star CEO and founder Rob Wechsler will join Stax’s board of directors.
“The Covid-19 pandemic escalated the need for dynamic, flexible and digital payment options all the way from small businesses to enterprise organizations and the software vendors that serve them,” Weschler said in a prepared statement.
Stax has put together a track record of rapid growth. As a recent example, the firm last year made Inc. Magazine’s list of the nation’s fastest-growing private businesses. Stax ranked No. 815 with a 596% boost in revenue from 2017-2020.
It’s generating jobs as well. Stax in the last year grew its team by 80% to roughly 300 workers. The firm also has dozens of open positions listed on its website.
Meanwhile, Stax has served as a success story for Central Florida’s entrepreneurial community. In its early days, the company used local resources like accelerator Starter Studio or the Rollins College Venture Plan Competition to access coaching, funding and exposure.
One of the first investors in the company was Orlando-based venture capital firm DeepWork Capital LLC. It’s not surprising to see Stax hit the $1 billion valuation milestone, DeepWork Managing Partner Mitchel Laskey told Orlando Inno. “The team at Stax is a team that has delivered every single month for as long as we’ve known them, which is back to 2015.”
The growth of technology-focused businesses in Central Florida is important for the region. Those firms can create high-wage jobs and create economic impact as they scale, while also contributing to the diversification of metro Orlando’s historically tourism-dependent economy.
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