Plenty of attention has been given to fintechs solving issues around investing, banking or data management, but paying bills remains a headache consumers and business continue to need help with.
Investors, it appears, have taken notice. Startups looking to disrupt how bills are paid and expenses are managed are viewed with high regard.
When Business Insider surveyed 27 investors about the next up-and-coming fintechs, companies selected touched on seemingly every part of financial services. However, one area that got a considerable amount of picks was anything addressing issues around paying and managing bills, either for consumers or businesses.
In fact, of the 60 startups highlighted, more than 13% were focused on the billing process.
Why the target on paying bills? Simply put, it’s something that hasn’t gotten much attention, according to one investor.
“Bank-based online bill pay hasn’t changed much in a decade, which has enabled billers to persuade more and more consumers to store their payment credentials directly on biller sites,” Dan Rosen, general partners at Commerce Ventures, told Business Insider while recommending BillGO, which improves how bill payments are processed. “This makes it harder for consumers to track all of their bills and expenses in one place, and thus keep on top of their finances.”
Investors see big opportunities working with companies on bill pay
While most might think of average people as the ones keen for help managing bills, it’s actually companies where investors see the most potential.
Over 15% of the B2B fintechs recommended help businesses manage bills.
Some are straightforward in what they do. Digits, for example, assists small businesses with expense management.
“Digits is solving an important problem for companies: real-time cash management. The founders Jeff and Wayne are excellent product thinkers, and their technology is lightening the load on finance teams,” said Shaun Maguire, partner at Sequoia Capital, when recommending the company.
Others, however, tackle new industries entirely. Nashville-based Built is focused on the construction space, helping companies better track the flow of money between parties instead of relying on spreadsheets.
“Built is creating a new category of software to bring this market into the 21st Century,” said Mark Goldberg, a partner at Index Ventures, when highlighting the startup.
“The impact of COVID-19 on the workplace has only accelerated the need for firms to digitize the accounts payable process,” said Ryan Falvey, managing partner at Financial Venture Studio, while suggesting Roger.
There is still a need to help consumers with bills
To be sure, there are also opportunities in helping traditional consumers manage bills as well.
Some are actually able to split the gap, helping both people and businesses better handle bills more efficiently.
Papaya allows customers to pay any bill via their mobile phones, making the bill-paying process easier for customers while speeding up how quickly businesses get paid.
“It’s a pretty magical customer experience, and they have quietly built one of the most exciting new consumer fintech products in awhile and have a clever business model to boot,” said Charles Birnbaum, partner at Bessemer Venture Partners, when recommending the startup.
Others, though, are more customer-centric. DoNotPay is true to its name, helping customers do everything from cancel subscriptions to dispute parking tickets.
Steve Sarracino, a founder and partner at Activant Capital who suggested DoNotPay, said directly saving customers money is an extremely valuable characteristic of any startup that targets consumers.
“Consumer fintech companies live and die on product and [customer acquisition cost], and by saving their customers money and a lot of time and hassle they have the ability to build trust with the consumer (something Honey’s $4 billion acquisition by PayPal last year highlighted),” he said when recommending DoNotPay.
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