Why we invested in UNIPaaS (spoiler: it’s the next big thing in B2B payments)
By: Guy Yamen
Tags: Marketplaces, Venture Capital, Payments, Fintech, Investment

Why we invested in UNIPaaS (spoiler: it’s the next big thing in B2B payments) Guy Yamen Follow Feb 11 · 5 min read

Before anything else, if you’re a UK-based B2B digital platform and you’re looking for a comprehensive payments solution, sign up. UNIPaaS’s portal is live!

And now, back to where we haven’t started off yet!

Why we invested in UNIPaaS

David Avgi came marching into our office in the late summer of 2020, alongside the team he’s been working with on his new venture.

By the time he had left, two hours after, we knew we wanted to do something with him.

Since then, we had gone much deeper into analyzing the B2B payments space. And coming out of this dive we realized we just HAD TO do something together.

This short piece will describe why we got so excited in the first place, and why this initial excitement translated into a more analytics-driven appreciation of what UNIPaaS is about to do.

First meeting: September 2020

We’re in our conference room, masks on our faces (a refreshing moment nevertheless; meeting in person! six months into COVID!). The UNIPaaS team members know each other very well. They’ve all worked together in Safecharge, the leading payments technology company which Avgi sold to Nuvei for ~$900m back in 2019. They start talking, and we realize that in between the team members, there’s more than fifty years of payments experience.

They paint a stark picture of what’s currently broken in the B2B marketplaces’ payments space.

They share that the growth of digital platforms, and marketplaces in particular, is exponential, not least because of the pandemic. They tell us that the streamlining, onboarding, and workflow of marketplaces are fundamentally different than those of traditional DTC or online platforms. They continue that existing offerings seem to fall short of the unique needs marketplace customers have.

David decided to name the new venture UNIPaaS, which stands for UNIversal, UNIfied, and UNIque Payments as a Service, and as the session progresses, the same question creeps into the mind of each of the TPY team members present: “why do I get the feeling that UNI could also stand for UNIcorn”?

Then David shares with us that he’d already invested a considerable sum to launch UNIPaaS, and that he intends to invest side-by-side the lead investor, in a meaningful way.

Let’s pause on this for a moment.

There is some lingering debate in the VC world of whether having a successful repeat entrepreneur invest in his/her own new startup is a positive thing. One argument ‘against’ refers to the risk of incurring somewhat of a bi-polar mindset by the CEO, who’s both entrepreneur and investor. Another involves theories around what a healthy percent stake for an entrepreneur should be.

Our perspective is that the positives far outweigh the negatives. By, quite literally, ‘putting the money where the mouth is’, David demonstrated his level of excitement from this venture, showed his commitment to its success, and enhanced the alignment of interests between his investors and himself. Simply put, we at TPY loved seeing it.

From first meeting to closing: last quarter of 2020

Over the course of the following few months we’d spoken to dozens of practitioners in the digital payments space and to many others in marketplaces. The feedback we received was overwhelmingly similar: that the pain point described by David and his team was real, and that UNIPaaS’s approach to solving it made a ton of sense.

So what’s so compelling in the solution?

Fundamentally, that it is indeed a Payments Platform that can be offered as a service.

There’s no ‘deep tech’ in payments. No AI dark magic or a novel piece of hardware. UNIPaaS’s secret sauce is in the depth of its offering and its speed of execution, achievable only given the vast and intimate knowledge the team has of this space.

A year from kickoff, the team had developed a fully operational gateway engine, already processing thousands of transactions daily, with multi-channel (cards present; cards not present) connectivity to an acquirer (cards and APMs).

It launched a transparent billing system, offering clients real-time visibility into where the money is, and the exact fee and commission status. And it created a click-of-a-button API for pay-in and pay-out.

All written in-house, from scratch, tailored to this unique market’s needs, and based on best-in-class architecture. As a result, the platform is reducing time to payments for clients, and is built for scale, from day one.

By the end of the year, UNIPaaS will have developed a managed solution enabling marketplaces to seamlessly and effortlessly onboard sellers, vendors and contractors. It will accept payments on their behalf, enable splitting them, transfer funds, and do payouts. In short, marketplaces will have complete control over both buyer and seller experience while staying ahead of PCI /PSD2 strict regulation.

See a rough schema of what we believe UNIPaaS’s offering will look like by end of 2021:

And on top of all this, UNIPaaS obtained the UK’s regulator Payments Institution (PI) license, which enables UNIPaaS to support UK clients.

As investors, seeing the combined progress UNIPaaS has been making in product and operations in a regulatory environment has been jaw-dropping.

Now let’s bring along the best of the best to this journey!

Along the way, we introduced David to friends we thought were the absolute best B2B payments’ experts, and almost every single one of them had become an investor in this round. These included the fantastic Sarah Friar (CEO of NextDoor and formerly CFO of Square); the unstoppable Eric Sager (COO of Plaid); the fintech black belt guru Sam Hodges, CEO of Vouch Insurance and formerly President of Funding Circle; and the prolific product leader and angel investor Gokul Rajaram.

We’d also reached out to our friends at FJ Labs, the world’s leading fund in marketplaces investments, given their depth of knowledge of what future customers of UNIPaaS need, and now our partners in the UNIPaaS journey.

And when introduced David to some of our serial entrepreneurs of TPY’s portfolio companies, well, they all came back eager to participate. These included Talmon Marco (H2Pro; Juno; Viber) as well as Boaz Palgi and Erez Webman (Paramount Data; ScaleIO). It also included our friend Ofer Smadari (StackPulse; Luminate; not a TPY CEO…yet).

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To conclude…the pain is there, the team is there, the alignment is there, the platform is there, and the clients are starting to come. And then there are the opportunities for UNIPaaS beyond payments, in expanding its offering to banking as a service and lending as a service, and the size of opportunity becomes truly huge (more on that in a separate future post).

We’re truly excited to see the evolution of this startup into what we hope will become a new industry standard.