In April 2020, Spark Capital, a venture capital firm, led the $37.5 million Series B financing of Australian-based Zeller, a company offering seamless payment processing solutions. The successful raise was a major milestone for Zeller, supporting the company’s growth and expansion.
This article will provide an overview of Spark Capital’s involvement in series B financing and its broader involvement in venture financing.
Overview of Spark Capital
Spark Capital is a venture capital firm established in 2005, focusing primarily on early-stage investments in technology companies. With offices in Boston and New York, Spark invests across all stages ranging from seed to growth. Since its founding, Spark has invested in more than 140 companies and has been actively involved with numerous start-ups who have become prominent in the tech world such as Twitter, Tumblr, Warby Parker, and Oculus.
The team comprises seasoned partners and investors focused on fostering strong relationships with potential portfolio companies on the founder level. With an emphasis on ‘smart’ money, Spark believes in adding value beyond the capital by working closely with entrepreneurs over the life of their investment to unlock an even greater potential for wealth creation.
Given its impressive track record, Spark was able to secure a $300M fund back in 2015 that has been used to finance some of their most notable deals such as Uber’s Series B financing round and Zeller’s Series B round, totaling $37.5M this past June 2017.
Spark Capital Led $37.5M Series B Financing of Australian-based Zeller
Zeller is an Australian-based payments company, founded in late 2018. The company aims to fill the gap between traditional payment processing and innovative new products in the payments space. Through its digital platform, Zeller helps merchants access Open Banking and real-time payments, enabling more efficient payment processes. The company was recently recognized as one of the top 10 fintech companies of 2020 by KPMG Australia.
In June 2020, Spark Capital, a global venture capital firm focused on technology and media, led a $37.5 million Series B financing round of Zeller. This investment included participation from existing investors NAB Ventures and AirTree Ventures and additional new investors including Square Peg Capital and Moelis Australia. This financing will fund product development for further financial services integrations, expand into key vertical sectors such as hospitality and retail, grow its customer base across Australia and increase its market share globally.
Spark Capital’s Involvement
In June 2020, Spark Capital announced its involvement in Zeller’s Series B financing. The round was led by Spark Capital, with participation from existing investors and some new investors.
Spark Capital invested $37.5M in Zeller, the Australian-based payments platform.
This article will look at Spark Capital’s involvement in this Series B round.
Details of the Series B Financing
On 1st October 2020, Spark Capital, a world renowned late-stage venture capital firm, led the $37.5M Series B financing for Zeller Corporation, an Australian-based company providing small-to-medium businesses with automated order fulfillment solutions. Previous investors joined the round of Make Sense Partners and Brightstone Venture Capital.
Spark’s lead Partner on the deal Ben Ling commented on this round of capital stating “we are incredibly excited to continue supporting Zeller and its mission to empower the SMB tier of ecommerce marketplaces. The team has created a revolutionary unified platform for managing end-to-end logistics operations”.
This financing round will help Zeller further develop its technology platform, drive global expansion and pay more attention to support quickly scaling shop owners who rely heavily upon logistics systems. This follows from a $2M seed investment in 2018, an October 2019 Series A round where Brightstone VC led a $17 million funding, and the pandemic response funding announced in March 2020 which included investments from Stripe and Kabbage.
In addition to financial equity in the financing round there have been other benefits reported by parties involved – related business development opportunities shortly followed including signing strategic partnership deals with Shopify, Klarna and BigCommerce later that year which allowed merchants using these ecommerce platforms simplified access and onboarding capabilities for Zeller’s fast delivery services networks.
Benefits of the Investment for Spark Capital
Spark Capital’s involvement in Zeller’s Series B was a strategic move with several potential benefits for the investment firm.
First, Spark Capital was able to get in on the ground floor of a rapidly-growing company. Zeller’s user base had multiplied 30x in three years and its revenue more than tripled over the same period, suggesting long-term growth potential.
Second, Spark Capital had access to a solid management team. With proven leadership and strong market experience, they had faith that Zeller could capitalize on the opportunity before them.
Third, by investing in Zeller’s Series B financing round early in their growth trajectory, Spark Capital could benefit from both private and public-market returns if Zeller successfully transitions into a public company within the next few years.
Finally, with this investment round Satya Patel—a Partner at Spark Capital—completed his first major transaction as lead investor for a Series B investment. This has strengthened his reputation among other venture capital investors and has placed him in high regard among other players in the startup ecosystem.
Benefits of the Investment for Zeller
Spark Capital’s investment in Australian-based Zeller provided numerous benefits to the company. Not only was Spark Capital instrumental in securing the $37.5M Series B financing, they also provide a wide range of high value services that can help to grow and develop a business.
Firstly, Spark Capital provides market intelligence which allows Zeller to identify emerging trends and make informed decisions regarding their strategies, business plans, and products. Their research capabilities also allow them to spot new opportunities as they arise.
Secondly, Spark Capital offers technical assistance in process design and implementation guidance, keeping them ahead of their competition by updating the technology that supports their operations.
Thirdly, with access to networks of potential investors and customers across multiple industries worldwide, Zeller can leverage Spark Capital’s expertise and experience to reach new markets that were unavailable or accessible to them.
Lastly, Spark’s experienced team provides strategic advice for important decision making and helps secure key personnel for further growth opportunities.
Overall, investing with Spark has enabled Zeller to thoroughly explore its growth potential with financial muscle and support from a respected venture capital leader.
Market Analysis
Spark Capital led $37.5M series B financing of Australian-based Zeller. This move has brought up many discussions in the market, ranging from the company’s success, to the potential of their technology.
Let’s look at what this investment round means for the market and how it impacts the competitiveness of the space.
Overview of the Payments Industry
The payments industry has evolved dramatically over the past few decades, with digital and mobile payments becoming more prevalent in everyday transactions, and financial technology (fintech) companies providing more sophisticated payment solutions than ever. As a result, the payments industry is growing rapidly. According to a report by The Wall Street Journal, global e-commerce sales alone grew from $3.3 trillion in 2019 to $4.2 trillion in 2020 as more businesses turned to digital commerce to stay afloat and adapt during the pandemic. In addition, according to Deloitte Insights, non-cash payments totaled almost $18 trillion over an analysis period between 2017-2020—an increase of almost 36%.
This growth presents a significant opportunity for investors looking to capitalize on this expanding industry. Increasingly focused on mobile payments and open banking technologies, Spark Capital’s latest investment into the retail payments is a perfect example of investors looking to benefit from this growth. Recently leading Zeller’s Series B financing round of nearly $37 million, Spark Capital believes that by developing innovative merchants services products based on advanced APIs they can capture significant market share. Further leveraging Cloud technologies may prove pivotal for Spark’s plans with Zeller. Additionally, companies across all industries increasingly look towards exchanging data within trusted secure networks accelerating their business transactions & digital transformation goals. Such investments promise exciting prospects for the future of Payments market and its stakeholders alike moving forward into 2021!
Analysis of the Competition
Spark Capital’s investment in Australian-based Zeller occurred during intense competition among FinTech startups. Several large, well-funded companies were operating in the payments space and viewed Zeller as a major threat to their market share. The company’s innovative products and services allowed consumers to send and receive payments quickly and securely in real-time, disrupting traditional banking processes.
The competitive environment challenged Zeller to differentiate itself and gain market share, which Spark Capital was aware of during bargaining for its investment. Spark Capital propels Zeller forward by investing significantly more funds than comparable companies by increasing its overall value. This enables the company to move quickly in launching new products through expanded data storage capacity and improved marketing efforts through paid advertising campaigns with larger budgets.
Furthermore, because of the size of the investment made by Spark Capital, many investors took notice and have begun eyeing similar investments in Fintech related projects or ones similar to Zeller’s secure payments space – further emphasizing the power of Spark Capital’s decision to lead a series B round for this company during an extremely competitive period for these services.
Market Potential for Zeller
The Australian-based digital payments company Zeller is a promising new player in the rapidly growing digital payments space. Led by Spark Capital, the company’s $37.5M Series B financing demonstrates strong investor confidence in its business model and market potential.
According to Statista, the global mobile payments market size was valued at US$3 trillion in 2020, and is expected to exceed US$4 trillion by 2023 with a CAGR of 11.1%. Much of this growth can be attributed to increasing consumer demands for convenience and faster payments solutions that fit into our current digitized world. Furthermore, with smaller transaction fees than credit card companies and other payment providers, mobile payments are becoming an attractive alternative for businesses seeking faster payment processing solutions.
As such, Zeller is perfectly positioned to capitalize on this projected growth as it expands its offerings in Australia and beyond. In addition to its support from Spark Capital, Zeller has established local success since its inception in 2015, partnering with over 55 financial institutions with key expansion plans for Europe in 2021. Furthermore, with its groundbreaking technology platform that offers multicurrency capabilities across various payment types including direct debit schemes, Zeller stands out from other traditional providers with far-reaching opportunities for mass adoption propelled by extended market penetration through increased trust from consumers and businesses alike.
Conclusion
In conclusion, Spark Capital’s involvement in the $37.5M Series B Financing of Australian-based Zeller was a good move for both parties. Spark Capital’s investment posed a great opportunity for Zeller to expand their operations and grow their business. Spark Capital leveraged their experience and expertise to provide Zeller with a way to achieve success and their investment has already paid off.
Summary of Spark Capital’s Investment
Spark Capital was recently involved in a $37.5M Series B financing led by Spark Capital with participation from existing investors, including Matrix Partners, Linden Venture Fund and Salesforce Ventures for Australian-based start-up Zeller. Founded by experienced software industry professionals, Zeller is a fintech platform revolutionizing how customers shop and interact with their money.
The investment will help Zeller expand its product capabilities, accelerate its growth within Australia, and expand into new markets such as Singapore and the United States. It is expected that this Series B financing round will help support the team’s ambition to expand further internationally within the next year and bring innovative products to more than 1 million customers globally by 2021.
With this investment, Spark Capital joins an exciting group of strategic venture capitalists invested in Zeller to ensure they are best positioned to lead the fintech revolution in payments across all markets worldwide. In addition, the investment reaffirms Spark Capital’s commitment to investing in leading technology companies with exceptional visions of creating innovative products that can transform financial services worldwide.
Summary of Zeller’s Market Potential
Australian-based Zeller, who provides online and mobile payment solutions, has made significant strides in the market. As a result of the $37.5M Series B financing led by Spark Capital, Zeller is well placed to reach further markets and capitalise on the explosive growth expected in the mobile payment sector.
The mobile payments industry is expected to grow exponentially over the coming years. For example, Juniper Research expects it to more than triple in the next three years from $450B today to exceed $1.5T by 2023. With their innovative services providing friction-free payments services that help customers handle payments conveniently and securely, Zeller has positioned itself well as this emerging market expands internationally and into other core verticals such as hospitality and retail sectors.
Spark Capital have recognised this potential through their involvement in Zeller’s Series B round and believe that Zeller can leverage its existing user base of upwards of 3 million customers in Australia to launch into new markets quickly and efficiently with minimum disruption or complexity for customers or merchants alike. The company will no longer be limited geographically when competing against established industry leaders – providing exciting opportunities for expansion moving forward.
tags = Spark Capital, 37.5M, Australian-based Zeller, Gunderson Dettmer, Michael Hacker, australiabased zeller smbs 37.5m 300mshutechcrunch, small group of incumbents, best-in-class technology
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