Rainforest Raises $20 Million to Compete with Stripe by Offering Integrated Payment Solutions for Software as a Service Providers

Rainforest, an innovative startup that integrates payment processing into software platforms, has secured $20 million in a Series A investment round. This funding achievement comes shortly after the firm wrapped up its seed funding round.

The tactic of securing successive investment rounds was rather typical in 2021, though it has become less frequent in the changing market conditions of today. Rainforest’s impressive performance likely attracted the attention of new investor Matrix Partners along with repeat contributions from Accel, Infinity Ventures, BoxGroup, The Fintech Fund, Tech Square Ventures, and Ardent Venture Partners, bringing its total funds raised to $31.75 million.

In just the last half-year, Rainforest reports a staggering 17x growth in its processed payment volume, welcoming partnerships with “dozens” of platforms across multiple sectors. The Atlanta-based enterprise, just two years young, also boasts a valuation leap of “over 2x,” though it chose not to disclose exact figures.

Joshua Silver, the CEO and founder, envisions Rainforest as a unique payment-as-a-service provider that enables software companies to develop and enhance embedded financial services, distinguishing itself through a customer-centric approach tailored specifically to the needs of SaaS businesses.

Rainforest serves as an alternative to Stripe, facilitating transaction processes from end customers directly to businesses on software platforms. By differentiating itself through its focus on SaaS clients and offering dedicated support, Rainforest positions itself uniquely against competitors like FIS, Fiserv, and Stripe.

Silver asserts that unlike the “fast food-like” offerings of numerous payment solutions which achieve basic satiety without meaningful value, Rainforest empowers software firms to significantly boost their revenue through fintech. By introducing financial services, companies may achieve revenue increases of 2x-5x over their primary product offerings when properly supported.

Having previously established and sold the healthcare SaaS Patientco to Waystar, Silver’s experience with over 50 software platforms highlighted a universal dissatisfaction with existing payment integration options, prompting him to develop a superior service.

Silver found the market dominated by large processors and PayFac providers, whose services were not originally designed with software platforms in mind, leading Rainforest to fill this gap and cater specifically to software companies’ needs.

Rainforest is strategically capturing market share as it convinces software platforms to transition from traditional legacy processors toward its specialized offering, thereby directly competing with entities like Stripe in the embedded financial services and payments arena.

Highlighting Rainforest’s consumption-based revenue model, akin to cloud services, Silver advocates for the company’s understandable pricing and comprehensive support in risk management, merchant onboarding, and compliance — key areas typically challenging for software firms.

One of Rainforest’s notable acquisitions is the CRM and marketing automation platform Keap, serving 200,000 users and managing billions in payments, proving Rainforest’s capacity to support large businesses and compete effectively against established brands.

Expanding into various industries while enhancing its product offerings, Rainforest has embraced technologies like Apple Pay, 3DS, and Plaid to improve adoption rates and minimize fraud, showcasing its commitment to innovation within payment processing.

The embedded financial services market, projected to exceed $7 trillion by 2026, represents a vast, untapped opportunity for mid-market SaaS platforms in the U.S., according to Rainforest’s observations and industry forecasts.

With plans to reinvest its newly acquired funds in product development and enhanced support, Rainforest continues to build its team, currently counting two dozen employees, and aims to further its impact in the rapidly evolving payments landscape.

Matrix Partners partner Matt Brown recognizes the significant volume of payments transitioning to modern, embedded financial services software solutions. He commends Rainforest’s deep in-house technology and expertise across payments, SaaS, platform growth, risk management, and more, as key drivers of its success.

Following a similar path, Forward and Gynger have also secured significant funding, seeking to innovate within the SaaS space by offering respectively, service rental and embedded financing solutions to enhance client offerings and financial terms.

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