Israel has long been producing interesting start-up companies and another proof for its success story came on Tuesday evening. According to reports, an old Israeli start-up company had successfully raised $50 million in growth funding and the funds could help create a new giant in the global payments system industry.
BlueSnap, which started out in Israel as Plimus, announced it has been able to raise the money through investors such as the private equity firms Parthenon Capital Partners and Great Hill Partners. Parthenon Capital Partners closely led this recent round of financing together with BlueSnap’s chief executive Ralph Dangelmaier.
Expanding Global Presence
The payment software service company was acquired by the US-based private equity company Great Hill Partners in 2011. This is also when it changed its name from Plimus to BlueSnap. At the time, Plimus helped Israeli merchants to sell goods through the service, without much of a hassle typically associated with international trading. The private equity company Great Hill Partners found the technology enthralling and decided to acquire the company.
Furthermore, the company’s aim has remained dedicated to making selling easier by simplifying the payment process. Dangelmaier told in a statement, “When there are over 7 billion mobile devices worldwide yet 73% of U.S. merchants don’t sell globally, we feel there is a huge missed opportunity. We’re determined to help merchants sell beyond their borders.” The money from the latest funding round will thus be spent on expanding BlueSnap’s global presence, as well as to finance strategic acquisitions.
Indeed, the company’s local newspaper Beta Boston reported the company is aiming to open up offices in London and Chicago, “ramp up the marketing of its product, and expand the number of currencies, languages, and payment systems that it connects with”.
Currently, BlueSnap has offices in Waltham and Silicon Valley in America, as well as offices in Israel. It operates in 180 countries, with 29 different languages and it can process payments in 110 platforms in 60 different currencies.
The Growth of Online Shopping
Matthew Vettel, from the private equity firm Great Hill Partners, told in a statement, “This is the time for BlueSnap to expand aggressively. Merchants around the world need the technology they offer”.
According to a TechCrunch article, the market for new, easier payment system is huge due to the growth of online shopping. On top of this, the article claims the whole industry of payments has seen a ‘generational shift’ towards modern, contactless payment technologies. The article cites a 2013 report, which “indicated that online retail sales will reach $508 billion by 2020, accounting for nearly 14% of all retail sales”.
A Competitive Market
This shift has already helped BlueSnap grow and was one of the main reasons it was able to attract such a large investment. But the industry is also faced with a tough competitive market. BlueSnap’s biggest competitors include companies such as Adyen and upstart Credorax, which announced its own $40 million fundraising just recently.
Overall, the competition for technology start-ups remains fierce and the sector can offer plenty of interesting deals for private equity investors. If you are looking for similar deals, you can check out private equity platform Dealmarket. Mid-market technology companies like BlueSnap could offer private equity investors exciting opportunities in these difficult market conditions.