Atlanta-based Now secured $9.5 million in Series A funding for its NowAccount, an invoice payment tool that automates the process for how and when businesses get paid.
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Virgo Investment Group led the investment with participation from Cresset Capital Partners.
Lara O’Connor Hodgson and Stacey Abrams — yes, that Stacey Abrams — started the company back in 2010 — their third startup together actually — after personally experiencing the slow process of receiving payment for services and products.
Hodgson explained that she and Abrams started Nourish, a company making spill-proof bottles for children. In the beginning, they sold to small retailers, sending out 20 cases to various locations. Then an order from a big national retailer came in.
“We started doing the math — it would be shipping truckloads, which has more zeros behind it, and they weren’t going to pay with a purchasing card,” she told Crunchbase News. “We were used to customers paying with a card. We would run it and get paid the next day. For the first time, the client wanted an invoice.”
Although invoices often have the caveat of net 30 days, what Hodgson and Abrams found was it ended up being net 60 days, and in some cases up to 120 days. That inspired them to create a way to solve that cash flow problem so that businesses could access customers, commerce and capital to grow without “growing out of business,” Hodgson said.
Enter NowAccount: A payment platform that enables B2B companies to get paid immediately while allowing their customers to pay later. Qualified U.S. businesses generating up to $50 million in revenue get paid within two business days, with a 2.5 percent to 5 percent service fee, upon verification.
Here’s how it works: After delivering goods and services to your customer, you submit the invoice through NowAccount where it is processed, confirmed and approved. Once approved, Now pays the business 100 percent of the invoice, and the customer pays in its normal fashion, remitting the payment to a lockbox or account at Now.
“I run a large consulting firm that provides management training to large transportation and government agencies. When I was ready to launch a second product, I needed capital,” said Sheila Jordan, CEO of Knowledge Architects, in a written statement. “As soon as I signed up with Now, I was able to access my own company’s operating capital consistently, which helped us grow from $1.5 million to $18 million revenue in two years.”
Now is serving more than 1,000 businesses and has processed $700 million in invoice payments in the past 10 years. Hodgson intends to deploy the new funding into technology development as well as sales and marketing.
Hodgson said most of her clients were able to make it through the global pandemic despite outstanding invoices growing to more than 70 days from 48 to 50 days prior to the pandemic.
“It was a real test of the impact we could have,” she added. “Now is the time to scale it.”
Clarification: The Now investor Cresset Capital Partners named in this story is not affiliated with Chicago-headquartered private wealth manager Cresset Capital Management LLC (and related companies).
Illustration: Li-Anne Dias
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