(Bloomberg) -- Fintech’s newest unicorn doesn’t hail from San Francisco, London or Singapore. Instead, it’s built a 10-figure valuation from central Florida.
Orlando-based Stax said in a statement Tuesday it has raised $245 million from investors Blue Star, Harbourvest and Greater Sum Ventures in its latest funding round, valuing it at more than $1 billion.
“We’re a unicorn. This is the first time I’m saying it out aloud,” Chief Executive Officer Suneera Madhani says in a video interview with Bloomberg News last week. To celebrate, the firm has planned mimosas and donuts, with unicorn-themed activities and games along with a DJ to carry the festivities into the night.
Madhani co-founded the firm with her brother and Stax President Sal Rehmetullah in 2014, originally calling it Fattmerchant. The company offers flat-fee subscriptions for processing business payments, rather than charging a couple of percent on every transaction like many rivals. Stax has already seen $23 billion in transactions, and is partnered with 22,000 businesses and software platforms. It bought automated surcharging platform CardX in November, its third acquisition of the year.
“We’ve tripled in value since our last round,” Madhani says, adding the next stage of expansion will take Stax to European and U.K markets. “We’re competing head to head with Stripe.”
It’s a big ambition in a sector that’s seen a huge wave of growth, fundraising and blockbuster deals over the past few years. Stax’s latest valuation still leaves it as an underdog in the space.
Currently, a client could head to, say, Block Inc. (market value of about $56 billion) for mobile transactions, get a developer account from Stripe Inc. (valued at $95 billion a year ago) and invoice through QuickBooks (owned by Intuit Inc., which just bought Mailchimp for $12 billion).
Madhani wants to be a one-stop shop, giving bosses a full picture of their company health. “If you talk to any business owner, they’re not speaking in API language code,” she says. “I think that’s been the differentiator -- is that we actually speak in business.”
Orlando Unicorn
The Stax office has all the trappings of a Silicon Valley startup: open-plan workspaces, snacks on hand, a gym and even a recording studio. But it’s nestled in downtown Orlando, which is fast building an ecosystem for tech startups, according to Madhani.
“I’m technically the first unicorn out of Orlando. Definitely the only girl out of Florida,” Madhani says. Stax has also benefited from being a big fish in a small pond when it comes to recruiting, she added.
Madhani wants to set an example as one of the few women of color to build a company of this size. She hosts a podcast called CEO School and uses social media to share advice on leadership and motherhood, as well as the occasional TikTok dance.
“I think there’s a lot of gatekeeping in business, especially how knowledge is shared in locker rooms, country clubs, and boys clubs,” she said.
Just 12% of new unicorns -- companies that reach a $1 billion valuation without joining the stock market -- have had any women on their founding teams, according to statistics published by Crunchbase. The shortage of venture capital for women-led startups, particularly for women of color, led tennis star Serena Williams to focus her investment portfolio on diverse founders.
“We should invest more in women. That’s what the stats tell you. Because even with the little dollars that we have, we’re making a dent,” Madhani says. “Why are we not holding Silicon Valley accountable for having some parity in funding for women? This should be a mandate, as part of every venture fund that’s out there.”
Some of the issue stems from a lack of women making decisions at investment companies. It will take 30 years to reach gender equality at the senior management level of finance, according to a report published Monday by consultancy Bain & Co. Women held 32% of these roles in 2020, up just 1% over the course of two years.
IPO Goals
Madhani began her career doing payrolls, stocking shelves, and taking sales calls for her late father’s small business ventures at the age of 15. While she was the first in her family to graduate college, she describes working in her family chicken shop, grocery store, and gas station as her MBA.
Her immigrant Pakistani parents instilled a dedicated mindset into her and her brother, which they’ve carried over to Stax. Madhani says her father, who died during the pandemic, always knew that they were going to be “legendary.”
Stenciled on her office wall in purple is her father’s quote: “You Have It.” Her mother prepares a traditional butter chicken lunch once a month for Stax’s more than 250 employees.
Madhani sees plenty of room for further disruption. She’s curious about other currencies, the future of embedded finance, and what payments look like in web 3.0. But her next goal for Stax is getting ready for an initial public offering.
“I’ll see you at the stock exchange,” she says.
©2022 Bloomberg L.P.
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