NovoPayment CEO and co-founder Anabel Perez helped bootstrap the 14-year-old Miami-based banking and payment services software company, and now it’s on the cusp of taking its first venture capital dollars.
In a recent interview, Perez said she expects the company to announce the new investment within weeks, but she wouldn’t say how much NovoPayment is raising or who its new investors will be. Regardless, the money will help finance the banking-as-a-service (BaaS) company’s expansion in the U.S. as it builds on a business foundation laid in Latin America.
NovoPayment’s cloud-based software enables banks, credit unions and other companies to create and sell new digital services by connecting them to fintech partners through its application programming interfaces (APIs). A swarm of fintechs have descended on the traditional financial services industry, forcing banks and payment incumbents to rethink their approaches and innovate with new partners.
“There is a rush and pressure to grow in the fintech and financial services space like never before,” Perez said in the interview last week.
Fintechs have attracted significant sums from venture capitalists this year, landing $54.4 billion in the first half of the year, which already eclipses the $43.8 billion raised in all of last year, according to a recent report from consulting firm CB Insights.
Among fintechs, payments companies have raised the most money recently, attracting $8 billion, or almost a third of the total $30.8 billion raised during the second quarter, according to the CB Insights report. Fintechs based in South America have also benefitted from an increase in funding, the report said.
Despite NovoPayment’s Florida headquarters, the company has a concentration of clients in Latin America, including Venezuela, Chile, Columbia, Peru and Mexico, with only a handful in the U.S. About 85% of the company’s clients are in Latin America and about 15% are in the U.S., Perez said.
As for its fintech partners, NovoPayment also works with firms in Europe, in addition to those in U.S. and Latin America.
Perez said she plans to bolster NovoPayment’s U.S. customer base by pitching her company as the software “glue” that allows for integration of services in three key areas — digital banking, payments infrastructure and card solutions.
Providing those services on a single multi-country, multi-currency platform differentiates NovoPayment and lets it help its clients eliminate their “spaghetti stacks” of services provided by multiple rival vendors, she contends.
The company is already working with U.S. partners, including card giants Visa and Mastercard, to spread the word about its services in North America.
Still, it won't be easy to win new customers because competition has proliferated in the past few years. Other BaaS providers include Austin, Texas-based Q2, the French company Treezor and the British firm Bankable.
Perez, one of the few women leading a payments company, has built NovoPayment into a business that now employs 350 workers, about 43% of whom are women, she said.
Her career goals were forged in Venezuela as a banker for two decades, but she always longed to become an entrepreneur. Eventually, she co-founded NovoPayment in 2007 with Oscar Garcia Mendoza, now chairman of the company's board.
The company’s annual revenue is currently in the double-digit millions of dollars, she said, but declined to put a finer point on the number, other than that it’s well over $10 million. She also declined to say whether the company is profitable.
Still, she noted the potential. She said she believes there is a $3.6 trillion market opportunity in embedding fintechs’ new tools in financial services and other industries.
As for NovoPayment’s new investors who may benefit from future profits, they will be from the U.S., Europe and Latin America, Perez said; stay tuned.