Australian payment system start-up acquires US technology and data assets
Wednesday, July 17, 2013/
Melbourne-based payment system start-up Pin Payments has acquired the subscription payment management service and customer base of US-based Spreedly.
The acquisition opens up a global network of payment gateways and clients for the start-up which only came out of beta in May.
Pin Payments is Australia’s first all-in-one payment system, while Spreedly is a subscription management system.
Business development manager Chris Dahl told StartupSmart the acquisition was easier because the two company visions were aligned.
“Spreedly is a US-based company following a similar mantra to Pin, in that they’re trying to better enable online credit card transactions for businesses,” Dahl says. “Spreedly were working with a couple of global partners, but now they’re with us, it means our client base is global overnight.”
Pin Payments was a customer of Spreedly, which was shifting its focus to other products. Pin Payment customers kept requesting a subscription system, and Dahl says the suggestion to buy Spreedly came up in discussions and made a lot of sense.
This is the first acquisition for Pin Payments, which has also partnered with leading online store platform Shopify and is also working with accounting software company Xero.
“The acquisition was funded mostly through existing capital, with a trailing revenue share between Pin Payments and Spreedly. We expect revenue generated through the subscription business to pay back the cost of the acquisition within a year,” Dahl says.
Dahl declined to say how much the acquisition cost.
Dahl says the rise of software-as-a-service style businesses has made subscription models increasingly common. While Spreedly managed the subscription model, it still required a payment gateway, so clients required a merchant account.
“Our product removed the pain point of having to go and work with the bank and have an approved merchant account. But it didn’t make it really, really easy for businesses to build a subscription business model. But this acquisition means that now they can,” he says, adding that the acquisition means time to market has been drastically reduced again.
Dahl says the strategic investment enables Pin to offer a comprehensive subscription management service on top of their existing system.
He says Pin Payments will continue to invest and innovate in the service and will be launching the company in New Zealand in the next few months.