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Payments Startup Lands $356 Million Valuation, Tripling From Last Year

Balance, a two-year-old Tel Aviv startup that makes payments and checkout software for business-to-business marketplaces, raised $56 million in equity funding, bringing its valuation to $356 million, nearly triple its level from a year ago. The financing round was led by Forerunner Ventures, with Salesforce Ventures, Hubspot Ventures, Lyra Ventures and Gramercy Ventures also contributing. Kirsten Green, the founder and managing partner of Forerunner, will join Balance’s board of directors.

The financing bucks a downtrend in fintech, where stocks have fallen sharply and many startups have paused capital-raising efforts or slashed valuations. Shares of Block Inc., the payment processor formerly known as Square, have dropped 58% year-to-date. Restaurant point-of-sale software company Toast has fallen 59%. Stripe recently cut its internal valuation 28%, according to a Wall Street Journal report.

Today, the business-to-business payments market sees $120 trillion in annual transactions, but only a small fraction of them are executed digitally. The primary payment methods are paper checks, automated clearing house (ACH) transactions and wire transfers. Balance supports these traditional methods while also enabling new features like “payment on delivery” or “payment by milestone.” It extends credit to buyers while also paying merchants instantly for transactions up to $5 million. The company makes money by collecting fees on the transactions it processes.

Balance customers range across sizes and industries, counting restaurant-supply marketplace Choco and apparel platform Zilingo among its users. The company has also integrated with Shopify and Magento so businesses without websites can quickly set up online storefronts and begin processing transactions.

“In the next two years, if you’re not online, you’re essentially dead in terms of the dynamic in the market,” says Bar Geron, 33, Balance cofounder and CEO.

Geron and cofounder Yoni Shuster met while working at PayPal. Balance was inspired by innovations from payments companies like Stripe, which was an early investor. It plans to use its new funding to expand its presence in North America and potentially move into new regions.

“The business-to-business commerce market is expected to be five times greater than the consumer-commerce market and to be growing two times faster,” says Green of backer Forerunner Ventures. “At the same time, the business-to-business ecommerce space really hasn’t been modernized in the same way the business-to-consumer side has.”

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