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This little-known payments start-up is now Europe’s third-biggest fintech

IDBS ART GALLERY

LONDON — Prior to Covid-19, Mollie was a relatively unknown company. It is now one of Europe’s largest fintechs.

In September, the Amsterdam-based online payments processor became a “unicorn” valued at more than $1 billion, more than a decade after it was founded in 2004 by Dutch entrepreneur Adriaan Mol.

Mollie announced on Tuesday that it had raised $800 million in a mega financing round, valuing the company at $6.5 billion. According to CB Insights data, this makes it the third-largest fintech unicorn in Europe, trailing only rival firm Checkout.com.

Mollie’s founder explained that the company began as a text messaging service, but quickly shifted to payments after attempting to integrate its own system for clients to pay their invoices.

“I was amazed at how badly the traditional banks built that,” Mol told CNBC last year. “We created this abstraction layer for the banks’ complex systems. That was the beginning of our payment service.”

Shane Happach, who recently succeeded Mol as CEO, stated that the company chose to grow organically for several years before seeking outside funding for the first time in 2019. Mollie raised $100 million a year later in a round led by growth-stage tech investor TCV.

Mollie was soon inundated with offers from investors as a result of that transaction, according to Happach.

“We’re attempting to build a $100 billion company,” he explained to CNBC. “We understand that it takes a long time. It requires a lot of money.”

Blackstone’s growth equity investing unit led Mollie’s most recent investment round, a Series C. Other investors included EQT, General Atlantic, HMI Capital, and Alkeon Capital.

Fierce competition

Payments competition has increased over the last decade, with fintech players such as Stripe, Jack Dorsey’s Square, and the Netherlands-based Adyen all vying for a larger share of the $2 trillion market.

Mollie, unlike its American competitors, says it primarily deals with small businesses in Europe.

“A lot of the bigger players in online payments, like PayPal, are based in the United States,” Happach said. “Visa and Mastercard are both American companies.”

“A lot of investors aren’t betting on Europe,” he added. “Mollie is one of those one-of-a-kind assets that provides exposure.”

Stripe, which was previously valued privately at $95 billion, raised hundreds of millions of dollars earlier this year in order to expand further in Europe. The company has offices in both San Francisco and Dublin.

Unlike Adyen and Checkout.com, Mol claims his company’s service is more “localised” than Stripe’s and is not aimed at enterprise clients. Onboarding smaller merchants necessitates “complex” compliance checks, which some competitors are unwilling to perform, he added.

A large bet on European technology

Last week, French President Emmanuel Macron stated that he hoped that by 2030, Europe would have produced at least ten companies worth 100 billion euros each. According to Dealroom data, European start-ups have raised 45.9 billion euros so far this year, already exceeding total investment for the entire year of 2020.

“This investment demonstrates Blackstone’s confidence in Europe as a destination for high-growth companies,” said Paul Morrissey, Blackstone Growth’s European investing lead, in a statement.

Mollie, which claims to be profitable, intends to use the new funding to expand internationally, both within Europe in countries such as the United Kingdom and in other regions such as Asia and Latin America. The startup also intends to increase its workforce from 480 to 780 in the next six to nine months.

Coronavirus lockdown restrictions boosted digital payments significantly as more retailers moved their operations online. Mollie stated that it processed more than 10 billion euros in transactions in 2020 and that it expects to handle more than 20 billion euros in payment volume by the end of this year.

Mollie claims to have 120,000 monthly active merchants and to be adding 400 to 500 new customers every day. Clients include the U.K. food delivery app Deliveroo and the fitness apparel brand Gymshark.

source-cnbc

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