Plastiq Raises $6 Million In Series A
Based in Boston, Plastiq is an online payments company that has raised $6 million in Series A. The company’s goal is to bring credit card payments to industries that generally stay away from them. This round of funding was led by Atlas Venture and Flybridge Capital Partners. Previous investors that also participated in this round include NextView Ventures, Greenoaks Capital, and Harvey Golub (former Chairman and CEO of American Express).
Plastiq previously raised $2.3 million from Atlas and Flybridge in April. This brings their total to $8.35 million in funding. The company was co-founded by Eliot Buchanan (CEO) and Daniel Choi (COO). Buchanan said that he came up with the idea when he found that he could not use his credit card to make tuition payments while attending Harvard University.
In many cases, people cannot pay tuition, tax, and rent on credit cards. “Primarily, the reason is that the landlords, the schools, and the government don’t want to eat the cost [associated with credit card payments],” stated Buchanan in an interview with TechCrunch. “They don’t want to set up the infrastructure to accept the payments.” Other potential businesses that do not usually accept credit card payments include donations, boats, and artwork.
The company also has an API for deeper integrations in backend systems. Plastiq works with major credit card companies and payment networks to provide the infrastructure for the aforementioned types of businesses. The company charges a small fee for each transaction at between 1.5 and 2.5%. The merchants do not have any upfront costs. Currently hundreds of merchants are signed up and millions in transactions have been processed since the company launched one year ago.
Some of the company’s larger partners include University of Alberta (40,000 students) and Mount Royal University (20,000 students). The company has smaller offices in Toronto and New York. They will be using the funding to focus on product development, marketing, and partnerships.