Finix has been slowly chipping away at Stripe – which handles payments for millions of businesses – for years now. But after previously helping companies set up internal payment systems of their own, the startup officially became a payment processor in 2023, just like Stripe. Now, Finix is gearing up for its biggest push against the fintech giant yet.
In an interview with TechCrunch, CEO and founder Richie Serna says becoming a payment processor was “hugely transformational” for the business, and a main driver of its $75 million fundraise, which it announced on Thursday. When Serna founded Finix, he didn’t see it as a payments business, but instead as a “payments infrastructure” company. Now, not so much.
Serna says Finix has quadrupled its revenue in the last year, though he declined to share its true number of merchants. However, he told TechCrunch in 2022 that Finix was supporting more than 12,000 merchants, and now says Finix closed more deals in 2024 than in the company’s entire history, so Finix could have more than 24,000 merchants today.
That’s still a long way off from the customer-base of Stripe, who Finix directly competes with — at least if you ask Sequoia Capital. The venture firm led Finix’s $35 million Series B round in 2020, only to walk away from the investment weeks later after determining a conflict of interest with Stripe, which it also backed. Finix got to keep the money, but lost Sequoia as a backer.
Four years later, Serna says that moment helped put Finix on the map, and hasn’t had a lasting effect on the business. In fact, Serna says fintech companies like Stripe, Finix, and Adyen all have lots of room to grow in the payments space.
“One thing that we kind of try to correct, in terms of the narrative, is this idea that Stripe owns the entire market. We live in Silicon Valley. Everybody sort of believes that,” said Serna. “And so Stripe only actually owns 6% of the US market, and less than 2% worldwide. So payments is still relatively fragmented, and probably about 91% of payments today still goes through systems that were built back in the 80s and the 90s.”
So why would someone choose Finix over Stripe, and how are they different?
In some ways, these companies are more similar than when Sequoia abandoned its investment in Finix for being too competitive with Stripe. Both process payments for businesses, require little to no coding to get set up, and operate in Canada and the United States.
However, Serna says Finix is specifically building products for businesses with both in-store and online footprints, who don’t have the developers to build out those experiences. He says there are tens of millions of these companies in America. To this end, Finix offers more options for physical payments, integrating with several different payments devices.
Serna also says Finix offers more visibility into its pricing. Stripe takes a clean, but obscure, 2.9% cut of every transaction, plus a 30-cent fee. Finix, on the other hand, uses a cost plus model, breaking down everything it’s charging a customer for, and showing their markup.
With the new investment, Finix says it’s focused on growing its team beyond the 130 employees it has today, and expanding into more countries around the world. Ideally, the startup is hoping to take a bigger bite out of America’s payments system.
The $75 million round was led by Acrew Capital and co-led by Leap Global and Lightspeed Venture Partners. Other investors in the round include Citi Ventures, Tribeca Venture Partners, Homebrew, Insight Partners, Inspired Capital, and Cap Table Coalition. Finix has now raised $208 million in total funding to date with this Series C, which comes more than two years since the startup secured a $30 million tranche. Finix would not disclose its current valuation to TechCrunch, but says this was an up round.