San Francisco, Calif.-based startup Balanced says it is gaining traction with online marketplaces, the eBay-like venues where small merchants gather to sell products and services online.

"Marketplaces are the hardest e-commerce models to build and manage," says Jareau Wade, co-founder of Balanced, which offers processing and an escrow service.

Kitchit, a marketplace that allows customers to hire top-quality chefs to cook for them in their home, has been using Balanced since October 2011. Before Kitchit decided to go with Balanced, it considered PayPal, Stripe and Braintree.

"Balanced is built for marketplaces whereas the others would have required us to build a lot to make it work and deal with several regulations that Balanced takes care for us," says George Tang, co-founder of Kitchit. "They replace the headache and paperwork of managing payments with a beautifully integrated product where I don't need to worry about a thing. That enables us to focus on what we love."

Balanced is a "hybrid" company, providing payment processing as well as accounting, fraud detection and compliance, Wade says.

"We take a lot of burden away from marketplaces in terms of do-it-yourself; we couple all these things," Wade says.

Started by three roommates, Balanced offers next-day payouts due to the relationships it has with the Automated Clearing House network and banks, Wade says.

Balanced CEO Matin Tamizi often reads whitepapers from Nacha, the electronic payments association, to learn about the commercial banking system and payments, Wade says.

At first Balance's technology was similar to PayPal and Stripe Connect, allowing buyers to use it without a merchant account. In early 2012, after listening to feedback from customers, Balanced created a white-label offering, which it says differentiates the company from competing third-party processors. Balanced also integrated with Chase Paymentech for credit card processing.

The small company is making headway in the payments market. On April 2, Balanced announced it raised a $3.4 million round of seed capital from a group of investors, including Ashton Kutcher, Anddreessen Horowitz general partner Jeff Jordan and Y Combinator.

"We believe there's a lot of transformative value that networks have," Wade says. "It's typified in the investors we just brought on."

Balanced has 500 total marketplaces using its platform, with 130 of those added in March, Wade says. The company gives these marketplaces an account for every merchant. Balanced's transaction volume grew around 37% in March from February, he says.

Balanced charges 2.9% of the transaction value plus 30 cents. Next-day ACH payouts cost 25 cents more.

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