Austin, Texas-based Episode Six, a payment and banking infrastructure provider, today announced it has raised $48 million in a Series C funding round led by Avenir with participation from Anthos Capital. In an email, CEO John Mitchell said the tranche will be used to expand Episode Six’s go-to-market efforts and scale its business as the company looks to drive digital transformation journeys for banks and businesses operating in the payment area.
Episode Six was founded in 2015 by Mitchell, Chermaine Hu and Futeh Kao. To get around the limitations of legacy payment technology, the co-founders built a platform designed to streamline various payment processes while reducing costs.
“For CTOs and heads of product looking to grow their books and create competitive products, our platform enables them to quickly launch new products to meet a customer’s changing needs and capture market share,” Mitchell said in an email. email interview to MinRegion. “For CIOs seeking payments at scale with safety, security, reliability and cost-effectiveness, the platform provides a bank-grade payments infrastructure built by industry experts.”
Episode Six offers a range of different products to address specific, typical payment roadblocks. For example, one of its clients, First Fidelity Bank, used the platform to create a real-time payment system with card issuance and processing capabilities and fraud detection. Another client, TransPecos Banks, launched a credit card offering built on top of Episode Six’s infrastructure, while e-commerce checkout company Montonio uses Episode Six’s technology to enable credit card processing and acquisition.
“The burden of relying on outdated technology continues to be a challenge, especially at a time when innovation is key to winning and retaining customers,” said Mitchell. “This, coupled with the rising costs of using legacy technology, is why we’re seeing a significant increase in interest in our solution.”
According to Mitchell, a growing number of financial institutions, especially banks, are trying to modernize their tech stacks in the face of the increasing adoption of digital payments. A recent survey by Finextra found that 94% of banks are considering varying levels of investment in payment technology over the next 24 to 36 months. Of those respondents, 65% plan a “significant” or “moderate” level of investment in payment technology over the same period.
Of course, there is no lack of competition in payment and banking infrastructure. Streamlined, headquartered in San Francisco, recently raised $4 million for its business-to-business-focused payment product suite. Kushki is a much bigger player – the Ecuadorian payments infrastructure start-up brought in $100 million last year at a valuation of $1.5 billion. Other rivals include Pagos and Liquido, the latter of which aims to become the “Stripe of LatAm”.
Episode six, for its part, looks certain to attract business, with a presence in 38 countries and clients including the world’s 50 largest banks. Mitchell declined to answer questions about recurring revenue. But he said the startup expects to grow to 200 employees by the end of the year, up from 150 currently.
“Our strong commitment to long-term business management enabled us to resiliently navigate the challenges of the pandemic,” said Mitchell. “We suffered less as a result. Moreover, we have been sharply focused on modernizing the payment and banking infrastructure from the start.”
To date, Episode Six has raised approximately $100 million in venture capital.