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Exclusive: FlexPoint raises $35M to automate payments for MSPs

Mar 18, 2024
Illustration of hand with money reaching out of a computer screen

Illustration: Sarah Grillo/Axios

FlexPoint, a payments and financing platform, raised $35 million in debt and equity financing, the company tells Axios exclusively.

Why it matters: Managed service providers (MSPs) require tools that integrate into specialized software and unique workflows.

How it works: FlexPoint provides a vertical SaaS platform to help automate invoicing, payment processing, and payment reconciliation for MSPs and their clients.

  • It also provides working capital solutions to MSPs and short-term financing options for their clients to expand their business.

Zoom in: FlexPoint raised $5 million in equity financing led by Haymaker Ventures, with participation from existing investors Garuda Ventures, Far Out Ventures and Cascade Seed Fund.

  • It also secured a $30 million credit facility from Tacora Capital to expand its working capital financing capabilities.

Between the lines: The company makes money in three ways: from a SaaS platform fee, payment processing fees, and interest from financing short-term loans, FlexPoint founder and CEO Victor Lopez says.

  • Short-term financing generates the smallest portion of FlexPoint's overall revenues today, but the company hopes to use the credit facility to expand those capabilities.
  • "Because these are recurring customers, we have access to a ton of data on our customers and their relationships with their customers," Lopez says. "And because [the loans are] three to six months in duration ... we're able to make pretty quick underwriting decisions."

Fun fact: Lopez says Reddit is the company's primary inbound demand gen driver, particularly the subreddit r/MSP.

  • "Any buyer in the MSP space will go to Reddit, and they will search you and search every single post that's been made about you," Lopez says. "What's really interesting is, once you start to see early success in this market, it's pretty viral."

Flashback: FlexPoint previously raised $2.4 million in a funding round announced last September.

What's next: Though FlexPoint is currently focused on serving MSPs, it sees a broader opportunity to offer payment services to its customers' customers someday.

  • "We really view this as the opening to a very, very large market that we can reach in a very efficient manner," Lopez says.
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