WePay, a company that processes payments for websites, has raised $40 million in new funding to expand globally.
New investor FTV Capital led the round, with Japanese e-commerce giant Rakuten and existing investors Highland Capital Partners, August Capital, Continental Investors and Ignition Partners also participating.
WePay originally launched as an easier way for groups to collect money and make payments to each other. Over the past two years, however, WePay pivoted to handling payments for online marketplaces, donation sites, and other web businesses, including GoFundMe and Care.com
Rivals include Stripe, a hot payment processing company that was recently valued at $3 billion and has deals in place with Apple and Twitter. Another is Braintree, which was acquired by digital payments service PayPal in 2013 for $800 million.
Bill Clerico, WePay's CEO, argued that his company is different from competitors in that it focuses on marketplaces as customers. The rise of services like Airbnb and Uber, which connect buyers and sellers, creates complex challenges with payments that only a company like his can take on.
Specifically, Clerico said that WePay helps reduce the risk of payment fraud for its business customers. To illustrate the dangers, he gave the example of a crowdfunding campaign created by fraudsters who then fund the phony project with stolen credit cards. The crowdfunding platform would normally be on the hook for the amount stolen using these cards.
Clerico says that WePay’s patented risk and fraud detection is sophisticated enough to catch most, if not all, of these types of theft, saving the sites' money. If WePay’s technology doesn’t catch the fraud, the company will take financial responsibility for the transactions, he said.
It’s worth noting that Stripe and Braintree also provide fraud detection.
WePay, which charges companies 2.9% of each transaction amount plus 30 cents, says its revenue more than doubled in the first quarter compared with a year ago. The company said it processes billions in payments annually, but did not offer a specific number.
The latest funding is a Series D, or a later stage round. Overall, the six year-old company has raised $75 million in venture funding.
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