Aussie fintech Zeller has secured $25 million in Series A funding, at just a year old and without a product on the market yet.
Headed up by former Square execs Ben Pfisterer and Dominic Yap, Zeller is setting out to create an integrated financial services platform for SMEs, including a platform for accepting payments, a finance management system, and a transaction account and business mastercard.
Designed to allow businesses to convert sales simply, gain access to those funds more quickly and then put them to use, Zeller will ultimately alleviate challenges around cash flow, Pfisterer tells SmartCompany.
The Series A funding round was led by Addition, the new VC fund of high-profile US investor Lee Fixel, and also included repeat investment from Paul Bassat’s Square Peg Capital and Apex Capital.
It follows on from a $6.3 million raise, announced in June last year, which allowed the co-founders to execute on their plans, start building products and build up a team, Pfisterer explains.
Now, the startup has a headcount of 54 people. And, they weren’t necessarily out looking to raise again.
It was Fixel that reached out initially, and the round was wrapped up quickly.
“He’s a strong believer in allowing businesses to get on with doing what they’re doing,” Pfisterer explains.
After some “pretty serious due diligence”, the team got right back to building.
But, this is a considerable sum of money — particularly for a Series A raise — and especially for a business that has no product nor revenue to speak of.
That comes with the territory, Pfisterer says. This is not a market sector you get into on a whim.
“You can’t do it in half measures. You have to make sure you’ve got the right capital in place to build the right team and the right products.”
While a lot of fintechs are addressing one particular part of the payment process or trying to carve out a niche, Zeller is thinking big, Pfisterer adds.
He wants the startup to be the “main financial institution of businesses”, which means having a number of strong core products in place.
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This funding means Zeller is able to move forward quickly, with a launch date scheduled for mid-2021.
Zeller’s baptism of fire
Founded in early 2020, just before the first COVID-19 cases were reported in China, Zeller has had something of a tumultuous first 12 months.
For the SMEs it targets as clients, the landscape has shifted considerably.
On one hand, it’s been devastating to see small businesses struggling during this time, Pfisterer says. But, he’s also noticed “incredible resilience” and adaptability from small businesses as they get back on their feet.
Now, he’s expecting new businesses to emerge, in “one of the most fruitful and exciting times of entrepreneurialism in the Australian business community”.
Not only does he believe those businesses will be more adaptable than ever, he expects them to be more tech-savvy and aware of the products that can help them run as efficiently as possible — which bodes well for Zeller.
“While it’s been awful to watch, we’re really excited that our mission — being to help businesses start and grow — has never been more relevant,” Pfisterer says.
And it’s worth remembering that Zeller is a new business itself. It’s never really operated outside of a crisis.
It’s been a learning curve to say the least, Pfisterer notes.
But, starting out in challenging times can ultimately set “a really good base”.
If you can not only survive something like the COVID-19 pandemic, but thrive and grow throughout, “you set yourself up, culturally and responsibly, for times that are better”, he explains.
“Touch wood, the worst is behind us,” Pfisterer adds.
“But, in an ironic way, we do feel privileged that we’ve been able to set up during this challenging time.”