Sequential orders up to $19M led by a16z for new approach to B2B fintech • TechCrunch
When it comes to fintech, consumers have received the most attention over the past decade, with banking, credit, investing, and other legacy services getting the disruption treatment. But at the same time, there has been a growing trend to build more for the B2B market following the rise of tech companies, and today one of the new hopefuls in this space is announcing a funding ahead of a public launch in the fourth quarter of this year.
Sequence, which wants to create what it describes as a new type of FinOps stack for B2B companies – APIs and other tools to create more responsive pricing, billing and related services, leveraging data and analytics to do this – raised $19 million, a seed round that it will use to continue to develop its products and hire more talent.
Sequence is based in London, England, and the funding is coming from an impressive list of investors, given that the company has yet to launch.
Andreessen Horowitz – the Silicon Valley company becoming more active in Europe and a big backer for fintech startups in general – is leading the round, with Salesforce Ventures, Firstminute Capital, Crew Capital, Passion Capital, Dig Ventures, Fin Capital and 9Yards also attendee; round angels include the founders of Plaid, Intercom, Jeeves, GoCardless, Marshmallow, Lendable, Hopin, UiPath, Monzo, Comply and others who are not named.
Reports of this round, and in particular of a16z’s involvement, actually emerged about a year ago, with some of the attention coming not only from the big funder, but also from the track record of the founders. Riya Grover, the CEO, previously founded a “cloud canteen” startup called Feedr which was sold to Compass Group; Meanwhile, co-founder Eamon Jubbawy, who is the chairman, had been one of the co-founders of identity verification startup Onfido. In any case, at the time, the financing was not yet complete and ended up with more investors and at a larger size.
A quick note on valuation: Previous reports pegged Sequence’s valuation at $50m-$60m, but Grover said in an interview last week that the startup wouldn’t disclose that number. However, it is worth pointing out the factors that could shake it up. On the one hand, the “cost of capital” has risen sharply over the past year and has put pressure on valuations overall. But on the other hand, also last year, Sequence launched its private beta and leaked some early adopters like Deliveroo, Pipe, Snyk, and Reachdesk.
Companies like Stripe, Paddle, and Modern Treasury have opened the door to the ability for digital businesses – which aren’t necessarily the core of their payment and billing companies – to use APIs to integrate payments, billing, reconciliation and other more modern revenue-related services. in their financial stack. The opportunity that Sequence is targeting relates to all of these elements, but targets a more specific gap in the market.
As Grover described it to me, it’s one thing to make it easier for a business to integrate a payment stream into a product: businesses now actually have a lot of options if that’s what they need . What Sequence aims to do, however, is to make it just as easy to create more personalized pricing and payment services for the customer and at a particular time, much like what companies often do in e-commerce transactions. . The drive to do this stems from the fact that B2B sales have always had (and need) a degree of personalization and responsiveness, and while in the most traditional sense, human sellers can make the decisions to deliver that on the fly, the rise of more sophisticated automated selling technology offers the possibility of providing a similar experience on a larger scale when it comes to product pricing and payment options.
To do this, Sequence leverages payment and transaction data that its business customers might already have in their systems but have not been able to proactively analyze and apply, through application integrations. third parties such as Salesforce, HubSpot, Xero, NetSuite and QuickBooks. . (And it focuses on two main ways businesses pay each other for goods and services — bank or debit payments rather than card payments — for the payments themselves.)
In this, Sequence and its investors believe the startup is a forerunner in creating construction payment software that allows companies to capture real-time data and feed it into dynamic pricing and payment flows.
On top of that, Sequence is designed as a “low code” service, bypassing the need for developers to build, test, and ship changes using more accessible tools like spreadsheets and GUIs:
“In a B2B environment, when you create new products and pricing plans, you want an interface that doesn’t always rely on developers,” she said. “We give operators the means to empower themselves.”
The role of no-code and low-code software has often been described as being more efficient, or simply cutting red tape by helping non-techies become more proficient with the digital products they use themselves, but it has more recently adopted a more pragmatic and fiscal focus: at a time when companies are reassessing their spending on new products and projects and how they allocate their talent resources, services such as invoicing and payments are also being revisited.
Sequence cites figures from Notion Capital which estimate that B2B companies today spend between 7% and 9% of their revenue to build billing and payment infrastructure, and this includes not only investments in software or SaaS, but also the engineers needed to implement them.
“We saw an acute problem and therefore a compelling opportunity around payment and finance workflow automation and management,” Seema Amble, partner at Andreessen Horowitz, said in a statement. “The Sequence team has really impressed us with both a strong team and a set of initial customers who are excited about the vision.”