Google and Salesforce invest in UK payments startup GoCardless

LONDON: The venture capital arms of Alphabet Inc’s Google and Salesforce.com Inc are investing in UK payments startup GoCardless, which has raised an additional US$75mil to fund expansion.

The financing is being led by Adams Street Partners, GV, formerly known as Google Ventures, and Salesforce Ventures, GoCardless said in a statement.

Existing investors Accel Partners, Balderton Capital, Notion Capital and Passion Capital are also participating.

Valuation terms of the deal were not disclosed. Sky News first reported the interest from Salesforce.

GoCardless, founded in 2011, lets businesses set up recurring bank payments from customers online, rather than relying on a debit or credit card.

It said it was currently processing US$10bil in payments annually.

The company’s betting it can take a larger share of the US$2 trillion annual global payments market at a time when businesses are increasingly turning to subscription models.

Meanwhile, card networks such as Visa and Mastercard are reportedly planning to raise the fees they charge US merchants to process transactions.

About 18% of the world’s payments are recurring, GoCardless said. “The way these payments are collected around the world is pretty broken,” Hiroki Takeuchi, GoCardless’s co-founder and chief executive officer, said in an interview.

He said the company’s platform allows businesses to take direct debit payments from customers, whereas before companies would have had to use different procedures to set up payments in different geographies, or even between different banks in the same country.

The company, which employs 290 people, said in the statement it would use the new money to open new offices across Europe, Asia, and North America.

Takeuchi said the company would open a US office this year.

It currently has offices in the UK, France, Australia and Germany.

GoCardless also said that it would launch new features for customers, including the ability to process foreign exchange transactions, instant settlement, and using machine-learning to increase transaction success rates.

Takeuchi said companies should be able to get paid by direct debit in their local currency irrespective of where their customers are, and that this foreign exchange feature would “launch soon.”