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Italy’s Satispay raises €320M at a €1B+ valuation with backing from Block, Tencent and more for its indy payment network • TechCrunch

More signs that the economy is slowing down in Europe, and that costs are going up, are driving merchants and consumers to look for less expensive ways to carry out their everyday business. Today, a startup out of Italy called Satispay — which operates an independent payment network that bypasses big banks and credit companies and promises lower transactions fees plus other benefits like better budget control to its users — is picking up a massive round of funding on the back of strong demand for its services.

The Milan-based startup — which currently has 3,000,000 consumers and 200,000 merchants among its users — has raised €320 million ($305 million as of today, based on the current uber-strong dollar). CEO and co-founder Alberto Dalmasso confirmed to us that this Series D catapults the company’s valuation to over €1 billion (around $955 million).

The all-equity round has some very interesting investors in it, including some eye-catching strategics. It’s led by Addition, the firm founded by Lee Fixel; with participation also from Greyhound Capital, Coatue, Lightrock, Block Inc. (the U.S. fintech formerly known as Square), China’s Tencent (which owns WePay and much more) and Mediolanum Gestione Fondi SGR. Tencent and Block are among a group that quietly started to back Satispay back in 2021, while Greyhound has been investing in it since 2018.

This latest Series D is a major step up and a mark of Satispay’s ambitions: prior to this it had raised just €130 over three rounds. This latest round ranks as one of the highest-ever rounds for an Italian tech startup.

The funding will be used both to expand Satispay’s product set, as well as for geographic expansion. Satispay got its start in Italy and the country today accounts for the bulk of the company’s business, but the startup’s plans include expanding also into France and Germany, where it has started to build out its operations in recent years.

Satispay is part of larger wave of businesses that have emerged over the last several years with ambitions to build out payments rails that bypass those of larger, older, slower and more costly incumbents — a trend that has exploded with the rise of mobile phones, a much wider ability (and demand) for people and businesses to use digital networks for financial transactions, and frankly an appetite from investors to back disruptive tech that might prove to become the next “killer app.”

The ever-expanding group also includes companies like Dwolla in the U.S. (which Dalmasso says is probably the most similar to Satispay in terms of how it operates); peer-to-peer payment efforts like PayPal’s Venmo and Square’s Cash App; buy-now, pay-later services; and the plethora of blockchain-based efforts to build out new currencies and means of buying and selling; and much more.

Satispay got its start when Dalmasso and his co-founder Dario Brignone (who is the CTO) came together under a common observation: that the world was moving towards using less cash. But at least in Italy in 2012, there was a big gap in the market: a lot of merchants, especially the smaller ones that make up the majority of retailers and others in Italy, were not keen on using card machines because of the high transaction values.

Dalmasso’s metric was a single cup of espresso: it was the most common thing bought at a cafe and each one had to be paid for in cash.

So they set out to see if they could create their own payments network that essentially reduced the friction to pay for that espresso without customers needing to scramble for coins, and without giving merchants a pain point by making it cost them money to sell it by any means other than cash.

The bet was that once you created this, it would be used to pay for other things, and more expensive items, too.

Although the world has moved on a lot since then and contactless payments in many places have taken away the minimum spend limit (and prices have gone up, sadly), Satispay has built in other features that make it unique and has helped it remain popular with users. One of these is that users essentially deposit money into a Satispay account from their existing bank accounts to spend over a period of time, much like a pre-pay account, which helps them control what they spend monthly.

“The goal was not to create a new bank, since we all have bank accounts,” he said. This also means that Satispay still plays nice with banks and others.

There are plans down the road to improve the connections between bank accounts and Satispay so that users have more options of more continuous funding if they do not want to use the pre-pay option. And while there is no kind of credit in the app now, there are obvious synergies between Satispay and buy now. pay later services, so that is another option to explore down the road. Dalmasso confirmed that Satispay is running tests in this area currently.

For now, there are a lot of interesting use-cases where the current pre-pay app is finding a lot of traction. They include helping city governments provide food stamps to users (which are deposited as a sum on Satispay to be used for food purchases); and a surge of use during Covid when people wanted to pay for items remotely or even in person without even tapping phones or taking out cards, using just Satispay’s app on their devices to complete purchases. On average, people are using the app to make between 10 transactions and 18 transactions per month, Dalmasso said.

“Satispay is revolutionizing the mobile payment space in Europe, allowing users to transfer money efficiently and securely, not only in-store and online but with friends and family as well,” said Fixel in a statement. “We look forward to supporting Satispay as it continues to grow its team, expand its customer and merchant bases and accelerate its business to become Europe’s leading payment network.”

 

 

KSR

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