Modulr, the U.K. fintech that offers 'Payments as a Service' as an alternative to commercial and wholesale transaction banking, has secured £18.9 million in growth funding. Leading the round is Highland Europe with participation from existing investors including Frog Capital.
Modulr says the injection of capital will be used to further develop the payments platform and expand into new products and markets, including European expansion. It brings the total raised by the company to just over £43 million, not including a £10 million grant from the Capability and Innovation Fund (pdf).
"We are solving the problem of relationship and technical access to commercial and wholesale transaction banking," co-founder and CEO Myles Stephenson tells TechCrunch. "We’re providing a complete alternative to using a bank for payments: technology, regulatory permissions and direct access to the payment schemes."
Last year, Modulr became one of only a few non-banks to gain direct access to Faster Payments and Bacs, the two main U.K. bank payments schemes. The fintech is also a "principal" issuing member of Visa.
"We see ourselves as the plumbing layer behind the scenes -- delivering the payments infrastructure that enables other businesses to automate payment flows and reconciliation, embed payment flows within their platform and build entirely new payment services for their customers," adds Stephenson.
To date, businesses across lending, fintech, alternative banking, accounting, travel and more have processed over £25 billion in payments through the Modulr platform, which counts Revolut as one of its largest customers. Other partner clients include Sage, Liberis, Salary Finance and Iwoca.
In terms of competition, Stephenson says Modulr is typically replacing "the payment services provided by a bank combined with a technology service such as Bottomline Technologies." (Although, of course, there are other modern Payments as a Service providers, including challenger bank Starling).
"What we think makes us stand out is our sole focus on being a B2B and infrastructure provider with access to, and trust of, key regulators and payment networks/schemes," he adds. "This means we have the same level of access to payment schemes as a bank provides, but backed by our resilient, reliable and powerful API platform."