WePay, with New Funding, Takes Its Tech Tools to Other Countries
WePay has pushed its tools for international e-commerce payments primarily to U.S.-based companies, and the vendor is now looking to extend its reach abroad through a fresh infusion of funds.
"Platforms and marketplaces are by their nature global businesses. You have people who want pay out to sellers that are all over the world," said Bill Clerico, CEO and cofounder of WePay, which this morning announced a fresh $40 million round of investment led by FTV Capital and Rakuten, Japan's largest e-commerce company and one of the world's largest online marketplaces. Other investors include Highland Capital Partners, August Capital, Continental Investors and Ignition Partners.
It's the largest VC infusion WePay has received thus far, and it will use the funds to accelerate its international expansion, bolster its social-driven risk engine and expand its sales team.
WePay's international strategy has two phases. The first is enabling existing companies such as GoFundMe to accept payments that originate in other countries, a strategy that's ongoing, Clerico said, adding that even within the U.S., there is still lot of room for growth.
"About 7% of payments are e-commerce," Clerico said. That percentage is expanding quickly, both in terms of size and execution, he said.
The second phase of WePay's international expansion is nabbing clients on the ground in new countries. The growth of companies such as Rakuten, one of WePay's investors, and Alibaba, have created a mobile commerce marketplace that's more mature than that of the U.S. This market breeds an opportunity to reach the same sort of merchant communities and small businesses that are WePay's bread and butter in the U.S., Clerico said.
The company plans to open an international office in the next year, as well as add staff and work with partners to attract new business and manage local compliance.
"Every market has its own regulatory regime and you need to get a license that may require things that you don't necessarily need to do in the U.S.," said Chris Winship, a partner at FTV Capital, which has aided other technology vendors' expansions into new markets. Winship will join WePay's board of directors along with Oskar Miel, a managing partner at Rakuten's FinTech Fund.
WePay will face some challenges in its new markets, such as regulatory differences and brand recognition, as well as basic differences in how people pay for things.
"For example, the vast majority of e-commerce transactions in the Netherlands are not made with cards, but with iDeal," said Gareth Lodge, a senior analyst at Celent. "Payments are a very domestic issue, and WePay will have to address that."
Building a brand in new markets is also a challenge, Winship said, adding WePay will benefit from its work with companies that have an international profile, such as GoFundMe. Companies like Uber are not only shifting payments from offline to online, but also shifting online payments to a hosted model. That shift will aid both WePay's domestic and international expansion, Clerico said.
WePay has been adding to its technology capabilities over the past few months to broaden the reach of the application programming interface its merchant communities deploy to enable sellers to accept payments. It's working with Google Wallet to make it easier for small businesses to add mobile payments and other merchant services; and is also working with Google technology to accommodate transaction volume volatility.
"Payments is a volume game. The costs are relatively fixed, and so gaining scale like WePay aspires to through international expansion should pay off," Lodge said.