In November 2019, Andreessen Horowitz General Partner Angela Strange famously declared that, “Every company will be a fintech company.”

Specifically, Strange projected that — in the not-too-distant-future — “nearly every company” would derive a significant portion of its revenue from financial services.

Over the years, that prediction has played out to a certain extent. More companies have embedded fintech, specifically payments, into their offerings. It’s no wonder then that infrastructure companies have proven so resilient even in the venture slowdown.

But not everyone agrees with Strange’s prediction. Joshua Silver, CEO and founder of Atlanta-based Rainforest, told TechCrunch in an interview that he believes that every software platform wants to embed financial services and embed payments into their offerings.

“But they don’t want to be a fintech themselves,” he said. “Being a fintech means you are highly regulated. You have risk management to contend with. You have compliance burdens. And the vast majority of software companies just want to add payments.”

Built specifically for software platforms

Rainforest, as Silver describes it, is a payments-as-a-service platform (PaaS) that helps software companies “build and optimize” embedded financial services. Founded in 2022, it has seen impressive growth in a short period of time, securing client commitments representing more than $500 million in processing, with much of the volume guaranteed, according to Silver.

There are a plethora of companies helping other businesses embed financial services into their offerings. Rainforest stands out in that it is specifically focused on software companies.

“We built our technology purposely for software platforms; competitors have not,” Silver told TechCrunch. “We provide low-code integration technology, true merchant portability and high-touch service, while bearing the risk and compliance burdens. It’s a very different model from competitors.” 

For example, it works with PayGround to help consumers pay and manage healthcare bills. RoadSync uses Rainforest to automate financial solutions for the logistics industry. Other customers it can name include Curae, Rose Rocket and QuoteMachine. 

“There are tens of thousands of software platforms like PayGround and RoadSync who are experts in their specific verticals,” Silver said. “We handle all of the service, which in the payment space includes risk management and merchant onboarding, and compliance — all the things that software companies typically are not very good at. And for our partners, we manage all of the risk.”   

A compelling model

Prior to starting Rainforest, Silver consulted with more than 50 software platforms on their payments strategies, and founded Patientco, a healthcare SaaS. He was so dissatisfied with existing embedded payments providers that he set out to build a better solution. 

Competitors, he found, were usually large modern processors or PayFac providers, all with DIY service models. And none were built directly for software platforms — rather, they were designed with merchants in mind.

“None of the modern processors were built specifically for software platforms. Most of them were built directly for merchants, and they’ve all had to retrofit their platforms even to accommodate basic payment processing and reporting functions for software companies,” Silver told TechCrunch. 

As such, the startup is capturing volume as software platforms migrate from legacy processors such as Fiserv and FIS. As that happens, it competes against companies like Stripe to embed financial services and payments.

Rainforest’s revenue model is entirely consumption-based, just like cloud services with the company earning a small percentage of each transaction processed. 

Investors have found the startup’s approach compelling. Rainforest raised $8.5 million in a seed funding round led by Accel. It also secured a $3.25 million venture debt facility from Silicon Valley Bank (SVB), a division of First Citizens Bank. Infinity Ventures, BoxGroup, The Fintech Fund, Tech Square Ventures, Ardent Venture Partners and a number of strategic angel investors also put money in the seed round.

It’s using the money to invest in the product in ways that will help software businesses “drive revenue and improve retention while enabling their customers to accept and send payments,” Silver said.

“Money movement is getting more complex, and we want to stay one step ahead,” he said. The company also wants to do some strategic hiring. It currently has just under two dozen employees, up from about one dozen at this time last year.

‘Payments is the universal language’

So far, Rainforest has created a referral stream from existing clients, payments consultants and venture capital and private equity firms that want better payments solutions for their portfolios, according to Silver.

It currently works in a number of different verticals, including healthcare, membership management, trucking, nonprofit and retail. Beyond expanding to new industries, Rainforest also aims to expand the breadth of its product by partnering with banking-as-a-service and lending-as-a-service companies, for example.

Another way Rainforest wants to stand out revolves around data portability. As software companies bring clients onto different payment platforms, Silver said, there is certain data that’s being collected to onboard those merchants — such as ownership structure, bank accounts and tax IDs.

“The reality is almost every processor today locks all that data up and it’s not portable,” he told TechCrunch. “I think we’re one of the only, if not the only payments company, out there that offers contractual portability. So our clients own their data, and we are contractually obligated to give that to them at any time.”

He added: “So we are not keeping clients because we have a long-term contract over their head.”

Silver is also excited about the opportunity in front of Rainforest because he believes that “payments is really the universal language.”

“No matter what industry you’re in, or what type of software company you have, payments is really the common thread that transcends it all,” he said. “And we need as an industry, and as a country, better providers to help power and free software companies.”

‘White-glove customer approach’

Accel Partner Amit Kumar says he was drawn to Rainforest in part because he found Silver’s founding story to be “super authentic.”

“His experience over the past few years embedded with companies of varying sophistication naturally led him to seeing the gap in the market,” Kumar wrote via e-mail.

The startup’s technology and service approach are its two biggest differentiators, in Kumar’s view.

“Building for this specific segment of customers from the ground up allows them to offer the right blend of functionality and flexibility, in a way that’s hard to compete with for companies that have bolted on this offering,” he added. “Additionally, this set of customers has different expectations and needs, where a more white-glove customer approach appears to be better suited to getting them across the line in adopting a modern payments platform. We’re seeing the value pay off already; Rainforest is growing rapidly mostly through word of mouth.”

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