Now more than ever, the payments market is becoming global, evident by studying the Asian and Australian markets which are two of the largest markets for financial services and financial technology. BCG values the emerging Asia-Pacific payments market, which already takes in over a third of global payment revenues, at around $90 trillion in 2016 and expects that value to grow to $135 trillion by 2020. More broadly, market research estimates that the Australian FinTech industry generated $180.2 million in 2015 and projects it to grow at a CAGR of 76.3% and exceed $2.92 billion by 2020.
A great example of this market growth is Melbourne-based payments company, Assembly Payments (formerly PromisePay). Assembly Payments is a payment processing platform that services marketplaces all over the world. When asked about how this growing global market affects Assembly, President of Assembly’s North America Operations, Doug Wilber, responded that “there are thousands of platforms looking to create fast, simple and trusted payments between buyers and sellers that don’t know each other. It’s a great deal more complex than just a payment, it’s an entire experience, and our technology delivers that experience seamlessly for platforms all over the world and with full protection to all parties."
In June 2016, Assembly Payments secured $10 million dollars in funding in a round led by Carsales.com. The round provided SixThirty with an opportunity to partially exit its holdings in Assembly Payments, as early investors, and to provide a cash-on-cash return in the high ‘teens’ for SixThirty’s early investors.
So how did SixThirty, the global FinTech seed fund based in St. Louis, end up investing in the Melbourne-based Payments company which, at the time in 2014, was still pre-revenue?
Since its inception, SixThirty has taken a global perspective to investing in late seed-stage FinTech companies. SixThirty sources its investments from a global pipeline, consistently drawing interest from companies located throughout Asia, Europe, and South America, all of which look to SixThirty as a launchpad to the North American financial services market. SixThirty’s Managing Partner, Atul Kamra, identified the catalyst of this mutually attractive investment opportunity as “[SixThirty’s] love [of] ideas and companies that have horizontal, global relevance and sensibility. Assembly’s success is a nice proof point.” This trend can be seen throughout SixThirty’s portfolio. Currently, one-third of SixThirty’s portfolio companies reside outside of the US, yet the founding team members, much like the Assembly Payments team, have one thing in common: all have traveled to St. Louis to tap into SixThirty’s network in the financial services industry and participated in its well-known business development accelerator program.
When the Assembly Payments founding team traveled to St. Louis in the Spring of 2014, no one expected that in two short years, the North American headquarters of the company would be firmly planted in downtown St. Louis. Part of the recent fundraising will be used to help grow Assembly Payments’ North America operations. Through its relationship with SixThirty, Assembly Payments established key partnerships in North America and was introduced to top-level talent in the payments space.
One of the reasons SixThirty was attracted to Assembly Payments is because of its relevance and role in enabling the growing “gig or 1099 economy” by facilitating payment transactions for independent contractors in global marketplaces, something many payment systems fail to do. With services such as AirBnB, Uber, Etsy, and even Kickstarter joining the incumbent marketplaces, like eBay, in their ability to share “1099ers” services globally, there is an ever pressing need to foster this prevailing ‘trust’ mentality between vendors and buyers everywhere. Simon Lee, Assembly Payments’ CEO, stresses that “there is no opportunity for true invisible and frictionless payments unless users can trust both the platform and the marketplace community.” That need for trust only becomes more paramount in platforms that serve global markets.