Today, small business (SMB) ownership represents a vast addressable market in the United States. Optimism in the SMB sector continues to see significant gains, with approximately 30 million SMBs in the U.S generating close to 50% of GDP. Almost half of American working adults are either self-employed or work for companies employing fewer than 500 employees -- a trend that will continue as people look for more sources of income and financial independence.
With the increased availability of mobile applications, we’re also witnessing a fundamental transformation in how digital technologies -- from insurance solutions (Newfront and CoverWallet) and productivity tools (Dropbox and Slack) to accounting solutions (Pilot and Gusto) -- are helping re-define SMB productivity and growth. In fact, Bank of America’s 2018 Small Business Owners Report found that nearly all small businesses manage some aspect of their operations directly from a smartphone. Interestingly, the same report highlights that only one-third of SMBs are leveraging digital technology to process payments and manage cash flow. That’s just a fraction of small business owners in the United States which begs the question: while there’s no lack of payment options available to SMBs today, why are the majority of small businesses not utilizing them to better manage cash flow?
Plastiq co-founders Eliot Buchanan and Daniel Choi believed there could be a simpler way for business owners to pay for expenses and maximize existing cash already in their bank accounts. When Plastiq first launched in 2012, the company found early success in helping individual consumers pay for expenses with a credit card that normally required a check or cash. Eliot and Daniel later discovered that these same consumers were also business owners and could leverage the same model to help empower SMBs. Working with major payment systems such as American Express, Mastercard, and Discover, SMBs can select the card of their choice to pay bills and allow Plastiq to do the rest -- managing rent payments, pay for utilities, loans, inventory, and even taxes -- while offering business owners access to card benefits such as points programs and early payment discounts. On the flip side, these businesses can make life easier for their customers and increase business velocity by accepting payments via credit cards powered by Plastiq. Today, a powerful network of Plastiq users exists that totals more than one million customers with billions in transactions across 150 countries and counting.
That is why Kleiner Perkins is thrilled to lead Plastiq’s $27 million Series C round of funding. Welcome, Plastiq, to the Kleiner Perkins family!