Salesforce Ventures, GV (formerly Google Ventures) and Adams Street Partners led a $75 million funding round for GoCardless, a digital payment service that allows merchants to accept recurring direct debit payments from customers, according to a GoCardless blog post.
Other companies participating in the Series E round included existing investors Accel, Balderton Capital, Notion Capital and Passion Capital. The company has now raised a total of $123 million, the company stated.
GoCardless will soon cover more than 70% of the world's recurring payment volume. It's adding U.S. coverage this spring, and by the end of this year its network will cover 35 countries and nine bank debit schemes, across the U.K., North America, Australia and Europe, according to the company.
Shopping subscription services, such as Stitch Fix and Amazon Subscribe & Save, have become increasingly common in retail in recent years. More recently, companies like Indochino have looked to boost sales by enabling customer installment payment plans. Both of these trends figure into a global rise in recurring payments, which GoCardless estimated now account for as much as 18% of global payments.
The subscription economy also encompasses replenishment services, application and software subscriptions, and professional services support. Overall, whether the subscriptions involve products or services, they allow merchants to have ongoing, long-term relationships with customers.
Often, payment for these subscriptions occur via card, bank transfer or check, according to GoCardless. However, problems can arise if a card reaches its expiration date. Also, card processing and bank transfers can take longer and cost merchants in processing fees. U.K.-based GoCardless is looking to improve logistics with a dedicated network for recurring direct debit payments.
In doing so, it's competing with traditional payment methods. It is also going head-to-head with PayPal, another digital alternative with millions of merchant and user accounts, although GoCardless claims lower fees and faster set-up.
GoCardless currently processes $10 billion in transactions annually and works with 40,000 merchants.