Investing in Rainforest

I’m excited to announce that I’ve led a $20M Series A investment into Rainforest on behalf of Matrix and joined the board. Rainforest enables software platforms to offer and monetize exceptional embedded payment experiences for end users.

There’s a famous saying from the 2000s: "Advertising is the business model of the Internet.” In a few years, we’ll look back and say that payments is the business model of software — and that Rainforest powered much of those software-embedded payments.

Successful B2B software is increasingly all-in-one and vertical-specific. I call these companies “vertical ERPs.” Classic examples include Shopify for e-commerce stores and Mindbody for fitness studios.

Thousands of fast-growing vertical software companies today serve every niche—law and architecture firms, pool cleaners, pet groomers, churches, non-profits, and more. These platforms’ products are as unique as the verticals they serve, but they all share one thing: they enable their businesses to accept payments.

These platforms, otherwise unknown outside their niche, process hundreds of millions, if not billions, in payments on behalf of their customers. So it’s unsurprising that embedded payments are a critical monetization strategy, often accounting for >50% of revenue.

But the bar for execution is high. Platforms expect a seamless, flexible, and beautiful payment experience. They want all the benefits of deeply embedded payments without headcount, expertise, and costs. This requires a combination of deep payments expertise with an understanding of SaaS products, platform growth, and product risk.

This is where Rainforest and its founder Joshua Silver come in. He co-founded a healthcare software and payments company that was acquired for over $450M and then started advising other platforms on their payments. From that position, he realized that existing providers all failed platforms in one way or another. So he decided to build the payments platform he always wished he had: Rainforest.

Everything Rainforest does—from its infrastructure choices (direct to banking partners) to its GTM motion (very focused on software platforms) to pricing (transparent and platform-friendly) to its post-sales success motion (hands-on and outcome-oriented)—is deeply intentional.

It’s clearly been designed by someone who has bought and implemented payments dozens of times, which Joshua has. That thoughtfulness appears in the impressive traction and customer satisfaction that Rainforest has earned in just a few months.

I’m excited to partner with Joshua and the rest of the Rainforest team as they help shift trillions of payments online and into software platforms.

Learn more on Techcrunch or rainforestpay.com