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Fintech startup Forward raises $16 million to challenge Stripe and lead the future of integrated payments

After Brandon Lloyd sold his second company, Bypass, a provider of payment and point-of-sale software to the sports and entertainment industries, to Fiserv in 2020, he got deeper into the payments industry and realized: software companies were getting a raw deal from the payment provider industry.

“Companies like Stripe originally built the platform to make it easy for online merchants to accept credit cards,” Lloyd told TechCrunch. “Since distribution is passed through the software company to the merchant, the software company needs support. Instead of generating revenue and doubling down on their SaaS revenue, they’re handing all of their payment revenue to the payment provider.”

It’s not uncommon for software companies to pay between 2.9% and 30 cents per transaction, and Lloyd doesn’t think they should be paying that much. Instead, he says their costs should be closer to 2% — and that difference represents a huge business opportunity for them.

So Lloyd left Fiserv in June 2023 and, along with colleagues Derek Victory and Danielle Madison, founded Austin-based Forward to bring what they had learned from the payments industry to the vertical SaaS community.

Forward works by letting SaaS companies rent out their products as a service for a fee. Its software sits within the customer’s software, saving them money. Forward manages authorizations, settles transactions, transfers funds, and handles reconciliation. And, because payment fees are lower, customers save some money.

Lloyd said Forward also focused on programmatic design, enabling technical integration in less than a week, ongoing sales support for merchants, and the ability to migrate to registered payment providers at any time.

Photo of the Forward Team (Photo credit: Forward Team)

Competing with Stripe and other payment infrastructure companies is a lofty goal, however, Lloyd believes Forward’s model has an advantage because it shifts the economics back to SaaS companies and helps them save money.

“Software companies attract customers to enable payments through their software applications, but when they start doing this, few companies can achieve scale,” Lloyd said. “In some cases, the opportunity is equal to their software revenue. If they get payments right, SaaS companies can double the size of the company from a revenue perspective.”

It’s still early days for Forward. The company started processing payments in beta in the fourth quarter of 2023. Since then, the company has completed millions of transactions. The company’s former employer, Fiserv, has also become a customer. The strategic partnership enables Fiserv to expand into the managed PayFac category and bring products to market faster for more than 1,500 SaaS companies that process tens of billions of dollars in payment volume each year.

Lloyd didn’t get specific, but did say the company is generating revenue and also paying revenue to its SaaS customers. For example, for every transaction made through the Forward platform, the software company gets an average of 70 cents back by adding a payment product.

This has also excited investors. On Thursday, Forward announced that it has received $16 million in seed financing. Commerce Ventures, Elefund and Fiserv led the round.

Lloyd intends to use the new funds to expand the company’s capabilities across clients and technology development, including machine learning and artificial intelligence.

“We have a lot of empathy for software companies because we built them ourselves,” Lloyd said. “When we meet our customers, they remind us of ourselves 10 or 15 years ago. We genuinely support them, and I think it’s a breath of fresh air in the payments ecosystem.”

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