Payments fintech GoCardless has neared unicorn status by securing $95m in a Series F funding round, bringing the company’s valuation to over $970m.

Bain Capital Ventures led the funding round, which brings the total raised by GoCardless to $240m, and comes after the fintech achieved a 46% year-on-year growth.

Hiroki Takeuchi, CEO and co-founder of GoCardless, said: “This funding round demonstrates the strength of the business and the confidence both our customers and investors have in GoCardless.

“We’re incredibly proud to have seen continued business growth in such challenging times, and to have been able to continue supporting our customers – helping them stay in control of their payments and cash flow.”

Expand its offering

The company plans to use the funding to accelerate its open banking strategy, combining new technology with its global bank debit network.

In addition, GoCardless hopes to expand its offering into the adjacent e-commerce market to launch a simple and secure way of making bank-to-bank payments as a lower-cost alternative to cards.

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Takeuchi continued: “We believe that open banking is set to disrupt the payment landscape by introducing new, simpler and more secure ways of making bank-to-bank payments that will compete with the traditional card networks.

“Our investment in open banking innovation will create a uniquely valuable payment offering – continuing to provide our customers with the best way to collect recurring payments.”

Speaking on the latest funding round, Matt Harris, partner at Bain Capital Ventures, said: “We’re excited by GoCardless’ enormous growth potential in a massive and largely untapped market.

“In particular, we’re seeing strong early results as GoCardless moves beyond SMBs to serve mid-market and enterprise customers and expands its international footprint to address a growing need for bank debit processing. We have enormous confidence in Hiroki and the entire GoCardless team to build a multi-billion dollar company that will redefine the payments industry.”

Open banking strategy

GoCardless’ investment in its open banking strategy aims to:

  • Provide an end-to-end recurring payment solution for its merchants: first-time payments via bank debit can take on average two to three days to process, prompting merchants to use alternative methods such as cards for the first payment. Instant first payments will offer a lower-cost alternative to cards, before the recurring collection continues via bank debit
  • Expand into the adjacent e-commerce market: develop a unique bank-to-bank payment method for e-commerce payments made to merchants that customers use on a regular basis. The aim is to provide an alternative to cards that will significantly lower transactions costs for merchants
  • Enable businesses to collect international payments: provide businesses of all sizes with global access to Open Banking / PSD2 and its equivalents around the world, all delivered into their existing bank accounts in local currency
  • Provide businesses with a complete open banking payment processing service, including features such as refunds, payment reconciliation and error handling.