Brite Payments, the Swedish fintech that has become a leader in instant payments, has announced a $60 million funding round led by Dawn Capital, who previously backed fintech pioneers iZettle and Tink. The round, which was joined by Headline and existing investor Incore Invest, will support Brite as they expand into new markets and develop their product.
The investment is particularly notable against a backdrop of falling fintech investment. Research firm CB Insights reports that, globally, fintech investments fell by 48%, about $7.3 billion, in the second quarter of the year. However, payments have been a cornerstone of fintech, showing resilience in the funding downturn, and Brite Payments growth since being founded in 2019 has put it in a strong position, attracting investment with its successful business model.
A business model that fuelled success
Brite Payments was founded in 2019 by Lena Hackelöer. Noticing that there was a space for account-to-account (A2A) payments solutions, and the development of the regulatory framework around open banking, Hackelöer drew on her experience in the fintech sector, including at Klarna, to launch the company. Currently ranked as one of Sweden’s fastest growing fintechs, much of its growth has been organic, and during 2022 it more than doubling its revenue and transaction volume, achieving profitability. It now offers services in 25 European countries and connections with 3,800 banks, enabling it to serve over 350 million customers.
Brite offers its clients the benefits of A2A payments, which gives them lower operational costs and reduced exposure to fraud and chargebacks. In turn, their customers benefit from a smoother experience. “We see account-to-account payments gaining momentum across Europe, but merchants are still struggling to realise the full potential for their businesses,” Hackelöer said. “That’s why we’ve built a complete instant A2A payments and payouts offering that can be plugged into any checkout, while eliminating operational hassles such as settlement accounts, reconciliation, or FX.”
Although open banking is still in its infancy for consumers in many countries, including the UK, it is well established in several European markets. And, because of its business benefits, increasingly favoured within industries and verticals that take payments. Adoption, however, is largely dependent on how accessible A2A and its related tools are. Brite’s solution, therefore, has been to make these as convenient as possible for businesses and their customers.
Seamlessly integrating into existing payment channels, the Brite A2A system can sit alongside current payment channels. However, because of the benefits they offer both businesses and customers, adoption of A2A payments are expected to grow rapidly with double-digit annual growth projected over the next five years as they challenge the dominance of traditional card payments.
Josh Bell, General Partner at Dawn Capital, noted Brite’s potential. “The prospect of real-time account-to-account payments becoming mainstream across Europe is on the horizon,” he said. “Lena is an extremely impressive CEO with first-rate domain knowledge and the all-round skills to build another market-leading global fintech from Europe. Deploying a driven bootstrap approach, Lena and her talented team have built a company with an impressive product and have rapidly reached profitability – a real feat for an early-stage open banking startup.”
Headline’s General Partner and Fintech Practice Lead, Jonathan Userovici, also noted the potential. “Companies like Brite are rare. Laser-focused on execution, they have built a great, real fintech product away from the spotlight,” he said. “Open banking is at an inflection point and the main driver of competition in the financial industry. With Brite, Lena and her team are building the category winner we have been looking for in a space that grows yearly at a double-digit pace.”
Building a Brite-powered economy
Brite also brings some diversity to the fintech space. As well as being female-founded, the Brite team includes more than 25 nationalities, which the company feels brings a breadth of knowledge and cultural mix they can leverage as they expand into different European markets.
They plan to continue developing their products, including the Brite Instant Payments Network, their proprietary network that offers instant payments around-the-clock.
Brite will also be using the funding to continue their rapid expansion. This will include not only strengthening their position in existing markets, but also starting to expand beyond, including outside the Eurozone. Ultimately, they hope that the ease-of-use combined with the financial certainty that A2A offers businesses will help them grow to provide a Brite-powered economy.