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Traxpay Takes $4M From Earlybird, Wants To Be The PayPal Of B2B Online Payments

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The online and mobile payments markets have seen a number of disruptions — from slashing fees for processing to turning mobile handsets into card processing devices — but many of those efforts have been aimed at the consumer segment. Today, Traxpay, a German payments startup focused on online payments the business-to-business segment, is announcing its own advance in this space: it has raised $4 million in a round led by Earlybird, one of the bigger VCs in the region. Traxpay will use to continue building out its business in Europe and start its expansion to the U.S. later this year, as part of its ambition to become the PayPal of B2B online payments — a $250 million market.

Separately, the company also announced that it has appointed a new CEO, John Bruggeman, who has previously held senior positions at enterprise software companies Cadence, Wind River and Mercury Interactive, as well as Netscape.

The online B2B payments market, says Traxpay, is potentially worth some $250 billion annually, but it’s been a space that has been slow to change, with many businesses still paying each other by check or costly or time-consuming money transfers.

Traxpay offers a cloud-based platform that it says provides full transparency on how your funds get transferred, with the funds stored in separate bank accounts used exclusively for a company’s own payments — effectively that means more security for a company to be able to withdraw funds without any risk not being able to meet the payment (as might happen with, say, a troubled bank). Payments, notably, get made in real time with instant access to funds by the receiving company. Traxpay developed the service in partnership with Accenture, SAP and NTT Docomo: that means expertise on scaling for global customers (Accenture); robust infrastructure (through NTT); and integration with some of the most commonly used accounting software packages (SAP).

Bruggeman tells TechCrunch that Traxpay’s main competitors are in the e-invoicing space, companies like Taulia, but he describes these as “beautiful e-invoicing services.”

“They do not complete the business with the actual transaction,” he says. Another competitor: credit card companies, which have started to offer services to businesses to manage payments. They offer an umbrella to manage services but those still go through the banking system, meaning that they are not in real time (typically taking one to five days to process a payment), Bruggeman points out.

Today, Traxpay has built its business in Europe, and it says it sells to the global-3,000. One example is Eos, a collections company that works with companies like Volkswagen and others to collect on their behalf. Using Traxpay enhances the kinds of payment services they can offer on to their customers.

One company that it does not compete with (not yet, anyway) is PayPal: “We’re differnet from PayPal because it was created as a consumer system that has been adapted to B2B, but we are a more natural fit because we operate within the more complex and typical environment that you see with large global companies doing business with other global companies.” That means integrating with accounting systems, managing several payments at once, among other things.

Earlybird, which recently added LinkedIn co-founder Konstanin Guericke as a partner, says that it evaluated 10 companies in this space before choosing Traxpay. Jason Whitmire, a partner with Earlybird: “We believe Traxpay has the potential to become the de-facto B2B online payment network,” he said in a statement, noting that Traxpay’s system offers “one of the most disruptive technology solutions since Paypal reshaped the B2C payments market.”


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