Today Earlybird Venture Capital announced its $4 million investment in Traxpay, the Cologne and now Mountain View-based company aimed at reshaping B2B payments once and for all. This quarter, the Traxpay solution was selectively installed with initial customers across Europe. Now the solution platform is heading into the US, with the new office and a new CEO. “Online B2B payments represent a nearly $250 billion market with many inefficiencies,” said Earlybird Partner Jason Whitmire in a statement today. “We think it is a massive opportunity for innovation.”
Ready, set, go: Time for B2B online payments to play catch up with B2C
Ever since Paypal reshaped the B2C payment market in ’98 (acquired by eBay for $1.5 billion in 2002), solution providers have vied for a similar, ubiquitous B2B solution online. Currently, though, 64% of US corporations still use cheques as their payment method. This figure is even more surprising when you take into account that 79% of these transactions are cross-border. Most payments still require manual process steps, with high transaction fees and multiple intermediaries. Bringing lessons of innovation from the B2C market while “thinking like a software company,” Traxpay is preparing to uniquely face the current situation.
Like Paypal, Traxpay payments are executed in real time, and reach their recipients in real time. Customers know at any given time which payments have reached their business partners, and can communicate with them through the Traxpay system. “Unlike other B2B payment systems that are limit you to a small number of characters, Traxpay lets you attach documents and photos. “If half the furniture you receive (as a company like Walmart, for instance) arrives damaged, you can send your payment for half of it with the photo attached,” Earlybird VC Ciaran O’Leary explains, ” Payments that allow enriched data are very useful.”
Backed by Accenture and SAP, Traxpay may be the permanent new solution
Unlike newcomers, Traxpay has already built strong relationships with global leaders from the banking, software, and consulting industries, including its co-developer Accenture and SAP, the global leader in enterprise resource planning (ERP) software. “Our business is B2B collections and payments with leading corporations,” said Stephan Spieckermann, general manager EOS Deutschland business unit B2B, the leading German ISO-certified company for credit, arrears and receivables management in the B2B sector.
“The opportunity to fundamentally change the payment process to get better control over capital and enable real-time payments gives us a huge competitive advantage and the reason we adopted the Traxpay solution.”Traxpay focuses exclusively on optimizing payment flows, leaving all funds under exclusive control of the customer.
John Bruggeman joins as the company’s new CEO
All funds within its system are stored free of default-risk under a separate bank account number, used exclusively for customer payments. Accompanying the funding is news of John Bruggeman’s appointment as the company’s new CEO. Bruggeman brings more than 15 years of C-Level experience and has served on the executive teams of Cadence, Wind River, Mercury Interactive and Netscape. His long-served experience in enterprise software companies complements the payment and banking experience of Traxpay’s executive management team. Who is he? Check him out on TEDx.