Paymill, the Rocket Internet-backed, Strip-like Web payment enabler, raised $13 million last month, but it isn’t quite finished there and the startup has revealed it has taken an additional €4 million ($5 million) from US-based investor Blumberg Capital.
Paymill, which operates in 32 European markets, says that the new funds will be invested in helping increase its hiring and local operations across Europe, while the deal is also a strategic one. January’s investment came via European backers Holtzbrinck Ventures and Sunstone Capital, and Paymill co-founder and CEO Mark Henkel tells TNW that the decision to bring on a new investor from the US brings it a presence in North America, but Europe remains its sole focus with no immediate plans to expand.
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“We’re not planning an expansion into the US this year or next year, but we want someone with an ear in that market. An investor with experience helps us keep up with developments in Silicon Valley,” he says. “When they first enquired we told them that the round had closed but they put an offer on the table that helps us invest further into people and local expansion and it’s a good fit for us.”
Today has certainly been a day for development since Stripe — the $500 million rated US company that is leading the space — may have opened a limited beta service in the UK today; invitations were sent out but there’s a degree of uncertainty after its founders backtracked, telling TNW they were distributed by mistake.
Irrespective of the semantics, Henkel says that it has long been clear that Stripe will launch in Europe. Rather than be cautious of the US firm — which has raised $38 million — he welcomes its arrival, saying it will be good for the industry and developers in the fight against less flexible payment options, namely PayPal.
“I’m really ready and happy, we’re both dedicated to solving pain points in payments. This is a huge problem, there are so many issues that there’s space for 10 competitors. We need to work against PayPal and others. So in that respect, Stripe isn’t a competitor, I see them as friends that are doing big things too,” he says.
Henkel says Paymill’s primary objective is to have a “concrete presence in Europe”, and for that reason the company isn’t looking to expand overseas to the US, or Latin America or Asia, where other Rocket Internet-backed companies — such as Lazada and Linio — are seeing growth and investment.
While he welcomes Stripe, Henkel cautions that Europe, as a market, is challenging and Paymill — which added 29 markets to its roster in November 2012 — is fully dedicated to the task, with a variety of staff and resources that Stripe does not yet have. Indeed, Henkel believes that Europe is a stiff enough task and only when they are satisfied with the Paymill presence there, will the possibility of expanding globally be entertained.
“There’s a great deal of differences [compared to the US market]. There’s no social security number to authorize payments [for one thing, and you] need good support since there are so many currencies and other local issues. A lot of people don’t realize that there is more than just the Euro too, for example.”
Henkel likens PayPal and others to big aircraft carriers, while Stripe and Paymill are small boats that are more nimble and simple to driev.
“It’s easier to integrate our solutions, there is less code,” he explains. “Stripe coming over will help people to see that there are better solutions [than PayPal], that’s good for us all.”
Last month, Paymill said it would grow its 25-person staff and Henkel foresees that it could have 40 employees by the end of the year. The next couple of months will see a new head of international strategy and senior VP join up and, though the recruiting process has kicked off, Henkel is avoiding a mass hiring spree in favor of “sustainable growth” that doesn’t harm the growing startup’s company culture.
Headline image via Han S / Flickr