Plastiq, a service that allows you to pay bills with your credit card, announced that it has raised $27 million in Series C funding. This round of funding was led by Kleiner Perkins. DST Global also participated in this round. In conjunction with this funding round, Kleiner Perkins general partner Ilya Fushman is joining Plastiq’s Board of Directors.
And Plastiq is planning to use this funding round to accelerate its growth and launch new services to help business owners and entrepreneurs to tap into their existing credit card lines to find business expansion. Plus Plastiq is going to develop and deepen partnerships with players in the financial and payment sectors like MasterCard. Plastiq currently works with all major credit card providers including American Express, Discover, Mastercard, Visa, and JCB.
“In the past year, we’ve seen a much greater interest for Plastiq’s services across the payments ecosystem. Business owners and consumers alike have told us they want to use their credit cards to pay any expense they wish, whether it’s business supplies or rent,” said Plastiq CEO Eliot Buchanan in a statement. “This latest investment will help us make Plastiq more available to our customers wherever is most convenient for them.”
Bank of America’s research shows that more than two out of three businesses plan to expand in the next five years but one in three has expressed concern about credit availability. And for many businesses, credit cards are their most accessible financing tool as it provides a revolving line of credit that can be immediately used to expand business operations. Using Plastiq, business owners are able to pay virtually all expenses by credit card, which allows them to manage cash flow, tap early pay discounts, and earn card rewards.
Fushman pointed out that today’s payments market is undergoing a rapid transformation that is driven by technology advancements benefiting businesses and consumers. And he said that Plastiq holds a unique value proposition that empowers small business owners to continue growing their operations and offers an advanced platform making it possible to pay for their most important expenses and obtain the capital they need.
There is a specialty medical clinic with more than 12 locations across several states called Metro Vein that uses Plastiq to pay vendors who do not accept credit cards. “With Plastiq, I was able to invest in a new line of business that has enabled me to more than double our revenues in the last ten months,” added Metro Vein President Dmitri Ivanov. “Using the service was simple and I consider the company a must-have for any business owner who is looking to expand operations.”
Last month, Plastiq announced expedited check delivery as part of Plastiq’s Accelerated Payment Suite. This feature includes standard and expedited ACH bank transfers and US domestic wire transfers.
Plastiq charges a 2.5% fee for this service. This cost can be offset by having a card that offers 2% cash back or points on every purchase. And often times you can negotiate early pay discounts with vendors and the Plastiq fee can be classified as a business expense on tax returns.
