Rainforest, a payment provider purpose-built for software platforms, announced it had raised an oversubscribed $20 million Series A funding round led by Matrix Partners. And additional participating investors include Accel, Infinity Ventures, BoxGroup, The Fintech Fund, Tech Square Ventures, Ardent Venture Partners – all of which joined in the company’s seed round announced last year. Matt Brown of Matrix is joining Rainforest’s board in connection with the funding.
The new funding round brings Rainforest’s total funding to $31.75 million and will be used to advance the company’s core technology and product offerings, expand its platform success team, and accelerate its growth via new go-to-market initiatives.
Rainforest helps software platforms increase revenue by embedding payments into their products without introducing any risk or compliance complexities. And the company has achieved a stronghold among software companies processing $50 million – $2 billion in annual payments. Rainforest offers a data-driven customized risk model for each platform, creating vertical-specific merchant scoring and precise fraud monitoring.
Since Rainforest’s seed funding round last year, the company grew its payment volume by 17 times. And it has signed dozens of platforms representing billions in processing volume across a variety of industries, including trucking and logistics, healthcare, specialty retail, professional services, field services, donation management, and more. The company has also advanced its product in ways that help software platforms grow payment revenue and reduce fraud.
SaaS platforms depend on payment providers to increase sales and satisfy consumer demand via secure, embedded payment processing. So far, incumbent providers have not served these platforms well for two primary reasons.
1.) They reserve higher-touch support for larger enterprise software platforms, leaving mid-market platforms hugely vulnerable with low support DIY models.
2.) Many incumbent providers started as direct merchant acquirers and later retrofitted their offerings for software platforms, meaning that core functions, including merchant onboarding, reporting, and reconciliation, were not optimized for platform use cases.
This model creates customer support issues with a snowball effect that impacts both the platforms themselves and the SMBs that rely on them.
Rainforest was launched in 2022 by Joshua Silver, who previously led healthcare payments company Patientco (acquired by Waystar in 2021) and later served as a payment strategy consultant across more than 50 engagements. The company’s leadership team includes VP of Payments Becky Kopplin, VP of Engineering Chris Church, and VP of Finance Cailey Ryckman, who all worked with Silver previously and bring decades of experience scaling software platforms and payment providers.
KEY QUOTES:
“Historically, Stripe excelled at helping startups take their very first payment – but they’ve very publicly shifted their focus to large enterprises, leaving mid-market platforms to choose between a DIY Stripe solution built for early stage startups or cobbled-together solutions from a bevy of upstarts. These mid-market platforms tell us that, prior to Rainforest, it was impossible to find a payment provider that offers a full package of modern technology, platform-friendly commercials, and high-touch support. With Rainforest, software companies don’t have to sacrifice or choose between robust technology, excellent support, and attractive contract terms. By providing embedded payments via white glove service that’s risk-adjusted and customized for software platforms, we’re empowering more companies to focus on what they do best: building software that improves economies and experiences for everyone.”
– Joshua Silver, founder and CEO of Rainforest
“Payments are still surprisingly siloed, inaccessible, and user-unfriendly. However, trillions in payment volume are shifting from old-school solutions to modern software platforms with embedded financial services. Rainforest is a dramatically better experience for buyers, sellers, and the platforms that connect them. I’ve founded and invested in companies with this software plus embedded financial services model over the last decade. I’ve seen dozens of approaches to payments, but none come close to Rainforest. They’ve built their core tech, not just a wrapper around others. They’re experts not just in payments, but in SaaS, platform growth, risk, and the many other areas you need to pull this off. Their impressive traction speaks for itself. I’m thrilled to support them as they continue modernizing embedded payments.”
– Matt Brown, Partner at Matrix and Rainforest Board member
“While many products in the industry were built for merchants and later retrofitted for platforms, Rainforest’s product was designed and built from the ground up for software platforms. Rainforest has invested in processes and automation to a degree that we don’t usually see at a company of their size. Everything is planned, built, and stress-tested to support rapid growth. I’m not surprised Rainforest is winning competitive deals over 80% of the time, against some very well funded payment companies.“
– Jeremy Jonker, Co-Founder and Managing Partner at Infinity Ventures
