- Podium, a startup that helps small businesses processes payments, communicate with customers and market to them, raised $201 million in funding from YC Continuity, Durable Capital Partners, Arpex Capital and other investors, according to a press release issued yesterday.
- The company, which services about 100,000 local businesses in the U.S. Canada and Australia, will use the money to add more small business clients and develop additional payments, communications and marketing tools, the release said.
- This funding round brings the Lehi, Utah-based company’s valuation to about $3 billion, according to the press release. In an email to Payments Dive, a spokesperson for the startup said that since last year it added 64% more local business locations to its platform.
Founded in 2014, Podium initially focused on customer reviews and communications, but pivoted to add payments via two-way SMS text messages in March 2020, according to a company press release at that time.
A month later, the company raised $125 million in funding from multiple investors, including some of the same investors in its funding round announced Monday.
At the time, Podium CEO Eric Rea said in a statement that the company repeatedly heard businesses complain about the difficulty of processing card-not-present transactions, so the company introduced payments processing to streamline customer interactions for local businesses.
This year, the company introduced its Podium card readers, taking on rivals like Shopify and Intuit that have also released their own point-of-sale tools over the past two years. To improve its competitive edge, Podium in October hired former Shopify executive Loren Padelford for the newly created role of chief operating officer, overseeing Podium's marketing, sales, business development, operations and international efforts.
The point-of-sale devices process transactions and help businesses communicate with customers to complete a purchase. Podium expects to process about $1 billion worth of payments for its small business clients by the end of this year, thanks to the new payment tools, the spokesperson said by email.
“We see this as a watershed moment for local businesses all over the world, especially as the world opens up again and local businesses are tasked with meeting the changing preferences of consumers who have welcomed digital-first interactions through the pandemic,” Rea said in a press release regarding the latest funding round. “Our goal is to help communities get back on their feet and to help local businesses participate in a meaningful way in the digital evolution happening at the local level.”
Podium’s transition to payments comes as the COVID-19 pandemic drives increased contactless payment adoption, a consumer habit that industry studies have suggested is likely to continue for the foreseeable future. According to a 2020 report from Forrester and the National Retail Federation, 67% of retailers said they accepted contactless payments in 2020, an increase from 40% in 2019.
Based on what it has seen in countries that have curtailed the spread of the coronavirus, Visa predicts that card-not-present transactions will persist post-pandemic.