Railsr, the fintech formerly known as Railsbank, raises $46M
Summary
Embedded banking has been on a growth tear in the last several years as companies turned to APIs to embed financial services like credit, payments and deposits to grow their revenues. The equity portion is an inside round, meaning all repeat investors, with Anthos Capital leading and Ventura, Outrun Ventures, CreditEase and Moneta also participating. Equity is expensive at the moment, he said.The company is not disclosing its exact valuation: Verdon called it fair value for the current market, and indirectly confirmed it was a down round compared to its Series B a year ago, when it raised $70 million (also led by Anthos), and Verdon said its valuation was approaching $1 billion, describing it as a near unicorn.Its definitely not last years valuation, he said of todays Series C. Prices have come down dramatically.The company is not yet profitable, Verdon noted in a statement today, describing this round as a significant step on our route to profitability.The state of the market, it seems, is not far from the state of Railsr itself. The playbook is focus on our strengths, he said.On the other hand, the companys appointed a new chairman, Rick Haythornthwaite, the ex-chair of Mastercard, and revenues grew 50% in the first half of the year, with growth, albeit less, projected for H2, numbers Verdon said were below previous projections but still going in the right direction.Its customer numbers, meanwhile, today stand at 300, versus 220 a year ago, which use APIs from Railsr to power credit, credit cards, loyalty, and more classic banking services.Verticals it targets include companies in the retail, venue, sporting and events sectors; as well as other fintechs. Banking thus becomes a basic (nearly commoditized) product that is easier and faster to integrate with an API rather than build from the ground up.Railsr cites Wagestream, Aviva and racing car brand McLaren (via QtmPay) among the case studies on its site, and also notes that HelloCash, Sodexo and Payine are customers.