Small and medium businesses (SMBs) generate ~44% of all US economic activity — and ~42% of those payments are documented via pen and paper.
A dude named Matan Bar wants to change that. And as the former head of PayPal’s P2P business, he’s probably the right person for the job.
This week, Bar’s SMB payments platform Melio closed $110m in funding ($256m total since its founding in 2018) at a $1.3B valuation.
In 2020, Melio grew 2,000% in the US.
Unlike enterprise-level platforms Bill.com or Tipalti — which Bar thinks are “too overwhelming for SMBs” — Melio was designed for SMBs alone.
SMBs tend to use Square and PayPal for transactions. But when making B2B payments to suppliers, they often just “[stuff] checks in envelopes.”
Instead of forcing businesses to take part in an ecosystem of services, Melio offers a standalone solution for SMBs to digitize paper invoices and bank transfers.
Melio is riding a pandemic-era wave of SMB digitization…
… and highlighted this trend in a recent survey, with 31% of respondents saying that embracing new tech (like digitizing customer and vendor payments) helped their business.
Age was also a factor: 39% of respondents aged 26-41 digitized customer payments, compared to just 12% aged 57+.
Get the 5-minute roundup you’ll actually read in your inbox
Business and tech news in 5 minutes or less