Financial technology start-up Currencycloud, which powers cross-border payments for a number of popular finance apps, has raised $80 million in a funding round backed by Visa.
Based in the U.K., Currencycloud sells payment software for banks and fintech firms to process their international transactions. Though not as well-known as consumer-focused peers like Monzo and Revolut, the company provides some of the crucial "plumbing" in the background for such apps to operate.
"We call the segment embedded finance," Currencycloud CEO Mike Laven told CNBC in an interview, explaining the firm embeds its product into platforms from big banks and fintechs. "We're probably the most important business that you've never heard of. But that's conscientious on our part. We do not have a strategy where we compete with our customers."
The firm's latest series of funding was co-led by Sapphire Ventures and Visa, and also attracted backing from Google, the investment arm of the World Bank, French lender BNP Paribas and Japanese bank SBI. Visa's treasurer, Colleen Ostrowski, will join Currencycloud's board following the deal.
Currencycloud counts Visa as a strategic investor, Laven said, and has partnered with the payments network to provide its clients access to Currencycloud's technology. The firm also works with a number of so-called challenger banks in the U.K. — including Revolut, Monzo and Starling — which have racked up millions of users who bank with them using only an app and debit card.
"Their end-user customers, for the most part, will never see that we're there," Laven said. "We're a piece of embedded finance in the tech stack. It's not as sexy, but it's an incredibly good business." One of the company's products, Spark, lets clients collect, store, convert and pay in 35 currencies.
Currencycloud's chief explained the market for business-to-business fintech — a sector that includes competing payment processors like Stripe, Adyen and Checkout.com — is "much larger than the consumer business" and "more profitable," albeit "harder."
Though his business is not yet in the black, Laven said "we could get there with the current round if we decided to," but that it had more room to grow before becoming profitable. "Our emphasis right now is not on profitability, our emphasis is on the strength of our offering and an expansion into other markets," he said.
The company's largest market currently is Europe, Laven said, while it has been increasingly investing in North America and is now looking to expand into Asia, where fintech has seen significant adoption rates. In China, for example, mobile wallets like Alipay and WeChat Pay have become commonplace, with many Chinese consumers using their phones to pay for things.
The investment in Currencycloud comes not long after Visa's $5.3 billion acquisition of Plaid, a company that specializes in application programming interface software to link fintech apps with people's bank accounts. Investors have been piling into these behind-the-scenes players, with Checkout.com winning a $230 million round and Stripe raising $250 million last year.
Currencycloud has now raised over $140 million from investors and claims to have processed north of $50 billion in global payments since it was founded in 2012. The company declined to disclose its valuation.