Ryft, a PSD2 and FCA-approved decentralised payments innovator, has raised £5.7 million in a Series A funding round. The latest funding brings the total raised to £7.4 million by the startup founded in 2021 by Sadra Hosseini (CEO), Alex Mackenzie (MD) and Richard Kirby (CTO). EdenBase led the funding; other participants included GPOS Investments, British Business Bank, Pembroke VCT, Sidebyside, Ingenii VC and several angel investors. The investment follows the £1.7 million seed funding the firm raised in 2023, led by SFC.
Ryft operates a payments platform that offers acquiring banks the ability to create digital platforms and marketplaces at a lower cost than Stripe Connect or Adyen. Last year, the firm formed partnerships with American Express, Worldpay and Clearhaus.
Ryft solved the challenge faced by the co-founders when they built Butlr. A digital platform that was sold to OrderPay in 2021. They faced limited options for compliant payment solutions that could capture, split, hold and process payments for various parties. The existing players are often costly and complex to use and offer limited support to meet the functionality required by the modern marketplace.
While organisations might choose to build a flexible, compliant platform, the team decided that Ryft could fill the gap in the market and provide an OEM solution that would meet today’s needs.
Rasmus Ny Sejer, Compliance Officer and MLRO at leading acquirer Clearhaus commented, “Ryft is a valued partner with a commitment to compliance, collaboration and outstanding technical support that enables our marketplace merchants to be successful. This has created a strong foundation for our mutual long-term growth.”
The platform is now live and in use by over 1,500 businesses. Thus, enabling their rapid growth without having to develop their regulatory guardrails. Ryft is hearing from customers who have switched from Stripe. Who are achieving up to 62% cost savings in payment fees.
What is next
The additional funding will help fuel further product development. Ryft plans to develop the technology enabling acquiring banks to manage complex payments between multiple parties at scale. Fortune Business Insights estimates that the global digital payment market size is projected to reach $19.89 trillion by 2026 at a CAGR of 24.4%.
The Ryft platform enables more complex payment transactions between different parties with support for complexities such as conditional delayed payments. The platform will enable banks to remain competitive in a modern commerce marketplace where startup payment providers emerge rapidly. Marketplaces are always looking for new payment methods that appeal to and attract customers.
Sadra Hosseini, CEO and Co-Founder of Ryft said, “Acquiring banks and most businesses were built for the one-to-one transactions of Commerce 1.0. However, in the era of Commerce 2.0, where transactions within a single marketplace involve numerous parties, financial institutions are struggling to deliver payment operations that meet the evolving needs of their customers.
“As a result, they’re unable to compete with the likes of Stripe Connect and Adyen whose solutions currently dominate the payments ecosystem despite high fees, complicated integrations, poor support, and prolonged payment wait times. At Ryft, we have the technology that allows acquiring banks to overcome these hurdles, and we’re actively exploring several strategic partnerships to solve this issue in the payments industry.”
Why the investors like Ryft
Ryft is led by experienced entrepreneurs who both understand the market and have a successful exit under their belt. They have an improving product that meets a clear need in a market that is huge. Since Ryft obtained its seed funding, the firm has secured its FCA license. It has formed partnerships and become a Mastercard Network Enablement Partner.
Importantly, it has proven success with clients such as Clearhaus, Future Ticketing and Charac. Only two and a half years after launching, the firm is profitable. It has consistently tripled its gross merchandise value year-over-year.
The funding will help maintain this growth trajectory over the next 18 months. With improvements to the technology, expanded headcount and an intent to launch internationally. The product enhancement will look to develop and extend the modularity of Ryft and add new payment solutions to the platform.
Eric Van der Kleij, General Partner at EdenBase, said, “Sadra and Alex are tried and tested entrepreneurs with first-hand experience of the headaches that finding a payment partner brings. As a result, they have created a unique solution that allows business owners to focus on growth. Secure in the knowledge that their payments are being handled in a compliant, quick and cost-effective way.
“The renewed focus on growing the acquirer side of the business demonstrates their commitment to promoting efficiency and transparency in the marketplace and platform payments space, aligning with the modern demands of Commerce 2.0.”
Fred Ursell, Investment Director at Pembroke VCT, said, “We backed Ryft because we saw a team with deep payments expertise, the ambition to challenge incumbents, and the execution to make it happen. Their rapid growth, capital efficiency, and ability to turn payments from a cost centre into a profit driver stood out.
“With a modern platform and strong regulatory positioning in an industry with attractive, long-term fundamental growth drivers, Ryft is well-positioned to scale. We’re excited to support Sadra, Alex, Richard, and the team on their journey.”
Enterprise Times: What does this mean
Already profitable and with a clearly identified target market. Ryft now has the funding to develop the platform further and increase market share. The big question is whether it can gain the same brand awareness that firms like Strip already have. This will be a challenge, and it will take some intelligent marketing spend to achieve this.
What is missing from this announcement is a clear focus on what their target prospects are. It has developed capabilities that suit many organisations. Which will it concentrate on, and which will be most eager to switch to Ryft or start working with them? Expect to hear more from Ryft both in terms of product enhancements and international expansion in the coming months.
