Routefusion Takes on the Multi-Trillion Dollar Cross-Border Payments Problem
$40 million in transactions, established payouts to 180 countries, global banking partners and relieved customers – Routefusion has had a busy first year
In 2019, before tech migration became a central topic, we led a pre-seed investment in a small Austin, Texas-based startup called Routefusion, a fintech company making it possible for businesses to embed cross-border payments into their applications, making them as easy as credit card transactions.
Traditionally, integrating cross-border payments is an impossibly unscalable task for businesses. It takes 6 months to a year to set up individual banking relationships with every country that will receive money, each country requires its own regulatory money transmission license, which means a compliance team is needed to handle new corridors. Then the tech department needs to integrate with each bank’s system. Afterwards, this solution will have to be continually managed – increasing engineering headcount and incurring continued transaction costs (e.g. the exchange rate in cross-border payments). In short, it’s time-consuming and expensive.
Yet, companies still need to pay across borders, eCommerce is driving more international volume and an increase in remote work means companies need a solution for payroll. The multi-trillion-dollar cross-border payments market is primed for a change.
By comparison, a developer using Routefusion can integrate cross-border payments with one API in as little as two calls, and then go back about their day.
We met founders Colton Seal and Rich Scappaticci through Parker Conrad, CEO of employee management platform Rippling and an Initialized Capital portfolio company. Rippling had done an extensive search for a solution to a big problem: how to quickly implement cross-border payments to run payroll to international employees. In the end, Rippling landed on Routefusion, consisting of Colton and Richard, operating in their basements at the time. Rippling quickly made an introduction to Initialized and we were impressed by Colton’s and Rich’s obsession with product and builder mentality, as well as their deep foreign exchange market knowledge – a rare combination. They had so much potential to take on a market that needed a simple solution to a very large problem.
In a year since our pre-seed investment, Routefusion has booked more than $40 million in transactions, partnered with seven different banking and liquidity providers and established payouts to 180 countries, with payment acceptance in 45 of those countries. They’re focused on the payroll and eCommerce markets to start, which combined is a $900B market opportunity alone.
We’ve worked hand-in-hand with Colton and Rich over the last year, landing customers and also going through the difficult times of being founders. We’re proud to participate in their $3.6 million seed round and we’re excited to continue to see them grow into the next phase of their journey as a company. I also look forward to furthering participation in the burgeoning tech ecosystem in Austin and in Texas, a vast state that is only matched by its resident’s dreams.
“There’s a vastness here and I believe that the people who are born here breathe that vastness into their soul. They dream big dreams and think big thoughts, because there is nothing to hem them in.”Conrad Hilton