Payrails Secures $32M to Streamline Global Payments

Andreessen Horowitz, the well-known US venture capital firm, has long backed the German fintech company Payrails, which aims to simplify global payment processes. The US investor has otherwise been rather reserved in the German market, but the founders seem to have struck a chord.

On Thursday, the Berlin-based startup Payrails received fresh $32 million in a Series A financing round

The founding team, consisting of Orkhan Abdullayev, Emre Talay, and Nicolas Thouzeau, previously gained experience at companies such as Delivery Hero. Thouzeau left the startup in 2023.

Payrails’ platform is aimed at internationally operating companies that operate in multiple markets. Complex payment flows, diverse payment cultures, and regulatory requirements often make market entry or expansion challenging. “Once a company reaches a certain size or is active in a particularly large number of markets, payments become very complicated. Each market has different payment methods and different ways of accepting them. One service provider can’t cover everything,” said Payrails CEO Abdullayev.

In Germany, many customers rely on PayPal or Sofortüberweisung, while in Saudi Arabia, the Mada payment system is most commonly used

The rules for credit card payments also vary from country to country. Payrails relies on a Payment Operating System that maps business processes related to payment transactions and integrates various functions – from payment orchestration, tokenization, and automated data reconciliation to solutions for in-person payments. More than 100 interfaces are designed to enable seamless integration with major payment service providers – as well as with enterprise software such as SAP, Salesforce, and Snowflake.

Payrails has already acquired companies from various sectors and markets as customers, including Puma, Vinted, Just Eat Takeaway, and Flixbus. In February, the startup entered into a strategic partnership with Mastercard to jointly develop efficient payment solutions for large companies. The startup declined to disclose revenue details at this time. However, last year, Payrails reportedly processed more than one million transactions daily and expanded into 30 new markets in Europe, Africa, and the Middle East.

International clientele

German venture capital firm HV Capital is leading the new $32 million financing round, supported by existing investors such as EQT Ventures, General Catalyst, and Andreessen Horowitz, also known as “A16Z.” “The need for scalable, integrated payments infrastructure has never been greater,” explained A16Z partner David Haber, explaining the investment.

“Payrails is developing the operating system tailored precisely to these requirements.” In addition to Payrails, Black Forest Labs, a company based in the Black Forest region that develops generative AI image models, is among the few projects supported by Andreessen Horowitz in Germany. Terra One, a Berlin-based startup developing AI-driven battery storage systems, was also co-financed by Horowitz.

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(Featured image by Adeolu Eletu via Unsplash)

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