Proper payments software can be quite an expense for some small and medium-sized businesses, but Plooto is developing a platform to get cash flowing for these companies.
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The company raised C$8 million ($6.34 million) in Series A funding, led by FINTOP Capital, which was joined by Luge Capital and Inovia Capital. This new funding gives the company a total raise of C$15 million, according to Hamed Abbasi, co-founder and CEO of Plooto.
For as little as $25 per month, Plooto offers cash flow management tools that enable businesses to automate accounts payable and receivable functions under a single platform. The platform also integrates with popular accounting systems to eliminate data entry, as well as automate the reconciliation of bills and invoices.
Abbasi said he got the idea for a next-generation payments company while working at Bank of Montreal. He said he witnessed the pain points for small businesses not being able to afford the enterprise cash management systems. Instead, the businesses would use consumer products, send wires or write checks, he added.
Joining with co-founder, Serguei Kloubkov, Plooto was founded in 2015 as a bitcoin blockchain company, but didn’t find product market fit, so it pivoted in 2016 to the payments company it is today, Abbasi added.
“Now even five or six years later, we still see many businesses going through the same thing,” Abbasi told Crunchbase News. “Meanwhile, COVID accelerated the shift to digital.”
During the company’s first two years as the new platform, it went through some growing pains, including switching from a free platform to a pay-per-transaction.
What Abbasi and Kloubkov found was that some customers used the product on a daily basis, and others would sign up and never use it. While talking to their engaged customer base about what would happen if the platform went away, they found that all of the friction spots were in financial operations, so they changed the business model to $25 per month for the software.
“We were forecasting 70 percent churn, but magically, we saw that 82 percent of customers stuck around,” Abbasi said. “When that happened, we knew we had product market fit. This was October 2019, before COVID. We could already see growth, and the pandemic accelerated businesses to convert to a full digital experience, so we were able to bring our solution to more businesses.”
The new funding will go toward product development, scaling the business and bringing in more sales and marketing support to serve the growing customer base, he said. Plooto has 30 employees currently, and he expects to double that by the end of the year.
In addition, each month the company is getting closer to double-digit growth and is setting records in terms of metrics, Abbasi said.
Next up, Plooto will be doubling down on customer experience.
“We have a big vision for what we want to do and the types of products we want to build,” Abbasi added. “We want our customers to get to their visions as quickly as possible, too. That in itself is the lifeblood of small and medium businesses.”
Gillani said he was tracking Plooto for a while, having known Abbasi previously. Having a product catered toward small and medium businesses is important because the payments market is a big opportunity, he said in an interview.
“We felt like now was the right time to be a strong partner,” Gillani added. “Annually, there is $120 trillion that moves between businesses globally. In the U.S., it is $25 trillion. These payments represent the heartbeat of the economy, and Plooto is at the center of that.”
Illustration: Li-Anne Dias
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