Payment facilitator Tilled announces $11M Series A

Tilled, a PayFac-as-a-Service platform provider, announced an $11 million Series A funding round Wednesday, led by Rebecca Lynn of Canvas Ventures.

The company provides payment service infrastructure to technology companies, allowing them to monetize sub-merchant payments and onboard new users and sub-accounts for end users. Tilled mostly caters to sub-industry software companies that want to monetize their service fees and act as “master” merchant account providers without actually becoming a payment facilitator.

Canvas Ventures was joined by former head of investments and M&A at Stripe, Abhinav Tiwari, and founder and CEO of Carta, Henry Ward. Existing investors Abstract Ventures, Peterson Ventures, Clocktower Technology Group and others also contributed. Canvas’ Lynn and Tiwari will join Tilled’s board of directors.

According to the announcement, Tilled plans to use the funding to add to its team, citing a need to fill more than 25 positions to be filled by the end of the year. Tilled CEO Caleb Avery says the company also has goals to expand into Europe, and release an omni-channel solution that allows companies to operate card-present terminals and other payment methods in addition to online payments.

Avery said in an interview with FinLedger that Tilled separates itself from “PayFac-in-a-Box” competition (such as Finix and Infinicept) by offering a turnkey payment facilitation solutions to providers in a matter of days or weeks as opposed to months.

For software companies, this is the first solution to market that… is a turnkey solution.

“I look at it as three legs to a stool. The three legs are technology, implementation and support, and payment economics,” he said, explaining Tilled’s PayFac-as-a-Service role. “There are a lot of existing solutions that only solve one or two. For software companies, this is the first solution to market that actually solves all three for software companies and is a turnkey solution.”

One of Tilled’s primary selling points is the ability for clients to create an additional revenue generation channel by eliminating the need to use payment processors like Stripe, Square and Braintree. These processors charge service fees that are passed onto the sub-merchant, eliminating potential revenue for the software provider.

“It’s only a passthrough, and it isn’t a valid monetization scheme,” Avery said. “The idea behind Tilled is allowing our clients to create a new revenue stream, where for example a dental technology provider can choose their price and earn revenue on everything that moves through them at the dentist’s office.”

Rebecca Lynn, lead investing partner, co-founder of Canvas Ventures, and newly appointed board member, agrees that Tilled is unique compared to competition in the PayFac market.

“It is the only solution that allows a company to capture the value of being a PayFac, and monetize their processing fees without becoming a PayFac,” Lynn said. She added that the low implementation effort and cost for clients to create new revenue streams was a major reason she decided to invest in Tilled.

Tilled is offering a way for technology companies to separate from huge payment processors without the need to build their own PayFac service, which comes with expensive development costs and lengthy implementation times.

The company’s service showcases one of a rising number of avenues which technology companies can take to benefit from fintech, and according to Lynn, highlights the unbundling of core banking software.

This PayFac-as-a-Service model could ease the minds of software companies that have been shy to touch payment processing, and shows a way to open up the fintech payment services sector to outside organizations. 

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