In an attempt to gain additional payments business, a slew of smaller businesses are entering the market while everyone waits for the $65 billion payments tech giant Stripe to go public. In a recent development, Dawn Capital led the €45 million ($47 million) fundraising for Danish startup Flatpay, which develops payment solutions for small and medium-sized physical retailers like restaurants, hairdressers, and shops.

Prior to this most recent Series B, Flatpay had raised just under $21 million; with this additional funding, its valuation has increased to far over $100 million. Along with expanding into new European markets, the company intends to use the funds to develop further products in addition to its current line of point-of-sale and card terminals. A few of these items may include AI, but just as a means of facilitating specific functions; it is not a fundamental service, according to CEO of Flatpay Sander Janca-Jensen.

He declared, “We have raised money without using the buzzword AI.” “It appears to be uncommon these days.”

Given the scale of the firm and the current European market, that €45 million represents a solid Series B investment. Just 7,000 people use Flatpay today, mostly in Germany, Finland, and Denmark. The company was founded in 2022.

Despite experiencing a 15% monthly growth in both its income and customer base, Flatpay’s business remains minuscule in comparison to other merchant platforms.

Europe has about 24 million small and medium-sized businesses (SMBs); over 17 million point-of-sale terminals; and there are hundreds, if not thousands, of additional payment systems that compete with Flatpay for the same clientele. These services include PayPal, Stripe, Adyen, Sumup, and smaller companies like SilkPay.

Despite the current economic climate, investors believe the firm has a lot of potential and are willing to make an early and substantial stake.

Janca-Jensen, who co-founded the business with Rasmus Busk, Rasmus Hellmund Carlsen, and Peter Lüth, stated that the lack of incredibly straightforward solutions for retailers seeking the convenience of technology without having to deal with its more complex aspects—like troubleshooting, comprehending intricate charge structures, and incorporating products into daily operations—was the gap that Flatpay identified in the market.

According to him, the business plans to close that gap in three ways. From the perspective of the customer, Flatpay only accepts merchants who handle more than €100,000 per year, and these clients cannot be multi-location franchises or chains. According to Janca-Jensen, if a customer doesn’t fit those requirements, they are frequently turned away.

Regarding technology, the business has developed very simple, flat fees (thus the name) of 0.99% for terminal transactions and 1.49% for POS purchases by matching the unit economics of its payment solutions with the intended client size. Therefore, Flatpay doesn’t impose a minimum charge for lone transactions and doesn’t impose costs when clients use foreign credit cards to make payments. Although Janca-Jensen acknowledged that Flatpay’s business strategy results in occasional transaction losses, in general, it lowers the bar for usage and promotes more spending and total income for the company.

What’s maybe most intriguing is that, in terms of sales, Flatpay only makes sales in-person visits. There are no plans to introduce, no virtual visits, and no internet sales (though there are experts who will help coordinate those in-person sales visits and handle support).

In a previous life, Janca-Jensen and his co-founders sold home alarm systems, which is how they became fond of direct field sales.

Similar to payment hardware and software, clients may find it difficult to offer security. Flatpay discovered that closing deals in person was the only method company could rely on. Furthermore, a thorough comprehension of the products is the only method for salespeople to close deals in person. “You need to train salespeople so they can adequately describe the product to consumers. It establishes strict guidelines for how Your product ought to be easy to use, stated Janca-Jensen. “We enjoy the challenge,”

He estimated that about half of Flatpay’s 200 workers are in sales, divided between those who assist in setting up in-person customer visits and provide support. Usually, rather than software sales, they are hired from other retail positions.

“We avoid fintech and SaaS account executives,” he remarked. He believes that because SaaS sales are so simple, those who work in the industry are “too lazy and complacent” to be successful in field sales.

Thus far, the objective in the three regions where Flatpay functions has been to appoint highly localised sales representatives who are aware of the subtleties unique to their markets. That appears to bring up a lot.

There are a lot of concerns about how effectively this can scale in the long run, but Janca-Jensen dismisses them, and investors are equally optimistic.

In the right hands, the field sales model is effective. Fintech expert Josh Bell, a general partner at Dawn, stated, “You can localise and roll out teams in a cost-efficient way to explain on a local basis why a product makes sense.”

He made the point that another business that Dawn supported, iZettle, was also a pioneer in the use of field sales to introduce its high-tech products to non-technical consumers. “They were successful, but even they could never match Flatpay’s level of performance. The potential for payments is enormous, and Flatplay has only scratched the surface.

Also taking part was Seed Capital of Denmark. in this round, along with other unnamed investors.


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