PayPal Vets emerge from stealth with $54M raised for embedded finance


Highnote, a full-stack embedded finance platform, emerged from stealth on Tuesday with $54 million in combined funding from both a Seed and Series A round. Oak HC/FT led the Series A and co-led the Seed with Costanoa Ventures additional participation from XYZ, SVB Capital, and WestCap.

Additional investor participation arrived from XYZ, SVB Capital, WestCap as well as angel investors Bill Ready, President of Commerce & Payments at Google (former COO of PayPal), and Renaud Laplanche, CEO of Upgrade.

The platform offers card issuing for virtual, physical and tokenized cards along with card management and bank accounts for users to embed into companies’ existing apps and websites. It does so through direct, API access to Highnote’s ledger that is PCI DSS (payment card industry data security standard) compliant.

Founded by Macllwaine and Kin Kee, former Director of Architecture at Braintree, the duo lunched Highnote to offer embedded finance and card issuing to small and mid-sized companies.

Prior to Highnote, Macllwaine has boasted a colorful career with four years running global development at Visa and heading up technology at LendingClub until he was most recently at Braintree. Experiences combined, in an interview with FinLedger Macllwaine said he was hoping to create a “fresh take on this notion of issuer processing, which is essentially creating payment methods and payment cards, from the angle of building something to scale.”

Highnotes typical consumers are companies that are post Series A and Series B that either have a card program they are looking to expand upon or searching for an embedded finance experience that includes the use of cards.

“Vaulting, PCI compliance, all API kinds of technologies and accessible capabilities are really the foundation of what we built,” Macllwaine told FinLedger. “A lot of customers don’t just want to fit in to a specific program and launch, they are looking to differentiate and extend their brand.”

According to Macllwaine, Highnote’s platform “significantly reduces” the time it takes a company to launch a card, from four to eight months to just weeks. Macllwaine told FinLedger because the system was designed fully on API’s the architecture has a more flexible data model and everything is configurable to help speed up the process. The platform also has pre-designed templates that can then be customizable.

“A lot of platforms you see today were designed ten years ago. Marqeta is a ten-year-old platform and was deigned ten years ago to solve problems from ten years ago, but now they are limited,” Macllwaine said.

It also helps that because of the open APIs within, the embedded finance platform isn’t starting from scratch every time it wants to launch a program with one of its banking partners.

“We don’t sit on top of the processor; we are the processor,” Macllwaine said.

The Silicon Valley-based platform has grown to a team of 40 people in the past year and plans to use its latest funding to boost its product and engineering teams as it continues to build out its platform including instant credit issuance, full-stack acquiring, and global expansion.

“While companies like Amazon, Shopify and Apple can meet this demand thanks to vast resources and armies of engineers, small and mid-sized companies can only rely on legacy providers who offer clunky, decade-old platforms which don’t give them control and require lengthy implementations,” Highnote said in a news release.

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