Montréal’s FlexPay raises $6m in seed round
FlexPay, a Montréal-based fintech using artificial intelligence (AI) to help e-commerce and subscription service companies recover lost revenue from wrongly declined transactions, has raised $6 million in a fresh funding round led by venture capital firm Impression Ventures.
The funding round also witnessed the participation from Anges Québec, BMO Capital Partners, and other strategic partners.
FlexPay is looking to sell its service to small and regional banks as well as credit unions in the US next year
The fintech says 24% of recurring credit card transactions are falsely declined, costing US-based online companies alone $250 billion in lost sales and customers according to research firm Aite Group.
FlexPay tackles this by analysing “billions of transaction records” to reverse-engineer the reason why risk-mitigation systems initially decided to decline the transaction, before using real-time data to approve what was always a valid transaction.
The start-up charges on additional recovered customers only which means all its revenue is currently generated by merchants. But FlexPay’s CEO Darryl Hicks tells BetaKit the company’s goal for next year is to get a proof of concept live with small banks, regional banks, and credit unions in the US to help them reduce fraud and approve more transactions.
This year has seen the start-up surpass the two million declines-processed mark and opened up access to a pool of four billion dollars in annual declines. “The next logical step was to invite venture partners to join us and add their capital and expertise to accelerate us to help billions of end-customers get their transactions approved,” Hicks says in a company statement.
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