In November 2019, Angela Strange, a General Partner at Andreessen Horowitz, famously declared that “Every company will become a fintech company.” Specifically, she predicted that in the near future, almost every company would generate a significant portion of its revenue from financial services.
Over the years, this prediction has partially come true as more companies have incorporated fintech, particularly payment services, into their offerings. It’s no surprise that infrastructure companies have demonstrated resilience even during a slowdown in venture funding.
However, not everyone shares Strange’s prediction. According to Joshua Silver, the CEO and founder of Rainforest, a software-focused payments-as-a-service platform (PaaS) established in 2022, many software platforms aspire to integrate financial services and payments into their products but do not want to become full-fledged fintech companies. They are reluctant to deal with the heavy regulatory, risk management, and compliance responsibilities associated with fintech.
Rainforest, specifically designed for software companies, has experienced rapid growth since its inception. It has secured commitments from clients representing over $500 million in processing volume, with a significant portion of this volume guaranteed.
What sets Rainforest apart is its emphasis on software platforms. The company offers low-code integration technology, true merchant portability, and high-touch service while handling risk and compliance burdens, which are typically areas where software companies struggle. Some of Rainforest’s clients include PayGround, RoadSync, Curae, Rose Rocket, and QuoteMachine.
Before starting Rainforest, Joshua Silver consulted with over 50 software platforms on their payments strategies and founded Patientco, a healthcare SaaS company. His dissatisfaction with existing embedded payments providers led him to create Rainforest.
Unlike competitors, Rainforest is purpose-built for software platforms, whereas most modern processors and PayFac providers were originally designed for merchants and had to adapt their platforms for software companies. Rainforest competes with companies like Stripe in the effort to embed financial services and payments.
The company’s revenue model is consumption-based, similar to cloud services, with Rainforest earning a small percentage of each transaction processed. Investors have found Rainforest’s approach compelling, leading to an $8.5 million seed funding round led by Accel and a $3.25 million venture debt facility from Silicon Valley Bank (SVB), among others.
Rainforest plans to use these funds to enhance its product, enabling software businesses to boost revenue, improve customer retention, and facilitate payment acceptance and processing. The company also intends to expand its team, aiming to grow beyond its current workforce of just under two dozen employees.
Rainforest has established a referral network through existing clients, payments consultants, and venture capital and private equity firms seeking improved payment solutions for their portfolios. The company operates in various verticals, including healthcare, membership management, trucking, nonprofit, and retail. It plans to expand into new industries and broaden its product offerings by partnering with banking-as-a-service and lending-as-a-service providers.
One of Rainforest’s unique features is data portability, as it allows clients to retain ownership of their data, which can be transferred at any time. This approach differs from traditional processors that lock up client data, creating long-term contract dependencies.
Amit Kumar, a partner at Accel, was drawn to Rainforest because he found Joshua Silver’s founding story authentic. Kumar believes that Rainforest’s technology and service approach are its key differentiators, catering to the specific needs and expectations of software companies. This “white-glove customer approach” appears to be gaining traction, as Rainforest experiences rapid growth primarily through word-of-mouth referrals.
