Investing in Dwolla

Posted on 02/24/2022 at 12:00 AM by Ashley Hunt

 

This is part of a series where we explore the innovation behind our portfolio companies and the defining reasons we offered investments.

 

While some businesses are still working to replace their manual payment processes with a less labor-intensive approach, today, digital payments are the norm rather than an exception. Unfortunately, many businesses accept the high costs that come with accepting and processing credit card payments as simply “the cost of doing business.”

 

Alongside these already high fees, credit card companies have announced their plans to raise these fees this year.

 

As businesses from start-up to enterprise look for more cost-effective ways to transfer funds, we’re seeing alternative funds flows, such as digital wallets and buy now/pay later options improve cash flow and streamline operations. Research shows that businesses need to diversify their payment methods by offering more payment types to become more attractive to their customers.

 

Since 2008, Dwolla has made accessing the financial system a simple, fast and affordable process. Today, Dwolla exists to unlock the power of the financial system by powering innovations with sophisticated account-to-account payment solutions. Through a single API integration, businesses configure a tailored solution for access to payment methods via the ACH and RTP® networks. With multiple payment options and real-time transfers, Dwolla’s technology brings the business benefits of account-to-account transfers into the digital age.

 

“Our initial investment in Dwolla was truly at the cutting edge of digital payment solutions,” said Craig Ibsen, Managing Partner at Next Level Ventures. “Years later, the company continues to be at the forefront of a very crowded industry, innovating their product to transform the way businesses and consumers move money and make payments.”

 

With digital and online payments increasing in popularity, Dwolla continues to expand its services and reach through strategic partnerships, as other fintechs look to add the value of account-to-account payments to their techstack. Recently announced partnerships with Plaid, Infinicept, and Hedge Pay all demonstrate the value of maximum flexibility and benefit in complementing services.

 

It is clear that Dwolla’s unique approach to expanding, adapting, and innovating has kept them moving the needle in the payments space. As the global digital payments market is projected to grow to $11.29 trillion by 2026, account-to-account transaction types are poised to transform payments as businesses realize the benefits of discarding outdated processes for payment rails that allow them to manage complex payment flows and transaction timing.

 

With their payment volume exceeding $35B in 2021 and client growth up 74% from 2020, Dwolla has massive growth potential in the payments and financial technology space.