Rainforest Raises $8.5M to Simplify Financial Services for Software Companies

Atlanta-based startup, Rainforest, has raised $8.5 million in seed funding to help software companies embed financial services and payments into their offerings. Joshua Silver, the CEO and founder of Rainforest, believes that while many software platforms want to embed financial services, they do not necessarily want to become fintech companies themselves due to the regulatory, risk management, and compliance burdens involved.

Specializing in Software Platforms

Rainforest, founded in 2022, stands out from other companies in the fintech space by targeting its services specifically at software companies. The startup helps these companies to “build and optimize” their embedded financial services. In a short period since its inception, Rainforest has secured client commitments representing more than $500 million in processing.

The payments-as-a-service platform (PaaS) offers low-code integration technology, merchant portability, and high-touch service, while taking on the risk and compliance responsibilities. Rainforest’s services are used by companies such as PayGround, RoadSync, Curae, Rose Rocket, and QuoteMachine.

Filling the Gap in the Market

Before starting Rainforest, Silver consulted with over 50 software platforms on their payments strategies. He found that existing embedded payments providers did not cater directly to software platforms but were designed with merchants in mind. Rainforest is now capturing volume as software platforms transition from legacy processors, competing against companies like Stripe to embed financial services and payments.

Rainforest’s revenue model is consumption-based, earning a percentage of each transaction processed. Their unique approach has attracted investors, with the seed funding round led by Accel and a $3.25 million venture debt facility secured from Silicon Valley Bank. Other investors include Infinity Ventures, BoxGroup, The Fintech Fund, Tech Square Ventures, and Ardent Venture Partners.

Future Plans for Growth

The funds raised will be used to invest in the product to help software businesses “drive revenue and improve retention while enabling their customers to accept and send payments,” according to Silver. The company also plans to expand its team, which currently sits at just under two-dozen employees.

Rainforest operates in a number of different verticals, including healthcare, membership management, trucking, nonprofit, and retail. Future plans include expanding into new industries and partnering with banking-as-a-service and lending-as-a-service companies.

One of the ways Rainforest aims to differentiate itself is through data portability. It allows clients to own their data, providing them with access to their information at any time. Silver believes that “payments is really the universal language” and sees a great opportunity in the industry for better providers to support and liberate software companies.

Accel Partner Amit Kumar praised Rainforest’s “white-glove customer approach” and the startup’s focus on building for a specific customer segment, which he believes positions the company well for rapid growth.