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Written by Ingrid Lunden

Marqeta files to raise $250M on a $1.9B valuation

The world of digital payments continues to power ahead — fuelled by the continuing growth of e-commerce and fintech — and now one of the bigger startups making waves in the sector is raising a huge round of funding.

TechCrunch has learned that Marqeta — a payment processing company that works in the area of powering payment cards on behalf of other brands along with related financial services — is in the process of raising $250 million on a valuation of $1.875 billion.

The figures come by way of a Delaware filing, provided to TechCrunch by PrimeUnicornIndex. Marqeta declined to comment on the filing, but we understand from a source close to the company that the round is in progress and could close as soon a weeks from now.

That also means the final figures might change although sources tell us that $250 million on a $1.875B valuation are the target figures for now.

It’s not clear who is in this round, but previous investors in the company that is based out of Oakland, CA have included Granite Ventures (which is its largest shareholder), Iconiq, Goldman Sachs, Visa (which led its most recent previous round, a Series D of $25 million), Max Levchin, CommerzVentures, 83North and more. Previous to this round, Marqeta had raised $116 million.

The round, a Series E offering of $3.8908 per share (with a little more on financials here), represents a big jump on Marqeta’s previous valuation, which was $545 million as of last year (when it raised an extension to that Series D round led by Iconiq — and that speaks both to Marqeta’s growth as well as the bigger opportunity in commerce.

The company — whose customers include other companies working in the fintech space such as Square, Alipay, Kabbage, Klarna and Affirm — said last October that its payment volume had grown 100 percent.

In the same month, it also spearheaded its first moves into the European market, where there has been a mini-boom of digital-only “challenger” banks like N26, Monese, Starling and Revolut. These have been successful in eating up market share from traditional incumbents: A recent report from Accenture, cited by Reuters, notes that challenger banks collectively now account for 14 percent of the banking market’s revenues in Europe, or €206 billion ($238 billion) compared to just 3.5 percent of the US market (which is worth $1.04 trillion).

That represents a big opportunity for Marqeta, which has built a set of services that complement those that commerce or payments companies might be building themselves. Alongside powering cards for others, Marqeta’s products include virtual cards, payment reconciliations, real-time fund transfers to optimise where a company’s cash is best utilised, customer interactive voice response services and more.

Guesty, a tech platform for property managers on Airbnb and other rental sites, raises $35M

The growth of Airbnb — and likewise other platforms like Booking.com, VRBO and Homeaway for listing and renting short-term accommodation in private homes — has spawned an ecosystem of other businesses and services, from those who make money renting their homes, to cleaning companies that make properties “Airbnb-ready”, to those who help design listings that will get more clicks. Airbnb has seen some wild success so far, but it turns out that being a part of that ecosystem can be a lucrative business, too.

Today, Guesty — a Israeli startup that provides a suite of tools aimed at property managers that list on these platforms — is announcing that it has raised $35 million, money that it will use to fuel its growth, after seeing the number of properties managed in some 70 countries through its tech double to over 100,000 in the last year.

The company is not disclosing valuation with this round, which was led by Viola Growth with participation also from Vertex Ventures, Journey Ventures, Kingfisher Investment Advisors, La Maison Compagnie d’Investissement, TLV Partners and Magma Ventures. But Amiad Soto, the CEO and co-founder, noted that it too has “more than doubled” since its last funding almost a year ago. PitchBook notes that round was around $90 million post-money, so this would put the current valuation at at least $180 million, likely more.

The idea for Guesty came about like many of the best startup ideas do: out of a personal need. In 2013, twin brothers Amiad and Koby were renting out their own apartments on Airbnb, and found themselves spending a lot of time doing the work needed to list and manage those properties.

Their first stab at a business was an all-in-one service to help hosts get their properties ready and subsequently tidied up for listings. “I was cleaning apartments, Koby was doing the business development, and my girlfriend was doing the laundry,” Soto told me in an interview. They quickly realised that this was never going to scale, “and also that our competitive advantage was building software. We are computer geeks.”

So the company quickly pivoted to building a platform that could provide all the tools that property managers — who work with individual property hosts/owners and had started emerging as key players as Airbnb itself scaled out — needed to juggle multiple listings. (That girlfriend is now his wife, so seems like they may have pivoted just in time.)

Guesty started as SuperHost and, like Airbnb, went through the Y-Combinator accelerator. It eventually rebranded to Guesty, and it now provides tools in a dozen areas that touch property managers and the job they do: Channel Manager (“channel” being the platform where the property is being listed), Multi-Calendar, Unified Inbox, Automation Tools, Mobile Management App, Branded Website Task Management, Reporting Tools, Owners Portal, Payment Processing, Analytics, Open API, 24/7 Guest Communication.

The plan is to complement that in coming years with more “smart” tools: the company is introducing AI and machine learning elements that will help it suggest more services to users, and for managers to use to do their jobs better.

(One example of how this might work: if you have a property manager in New York City, and the city regulator changes something in the tax code for properties in Brooklyn, this will now be suggested through to managers whose properties are affected, and this can help with pricing modelling down the line if the manager, say, wanted to keep a specific margin on rentals.)

Perhaps because short-term property renting is a relatively new area of the accommodation and residential market, it’s fairly fragmented, and so Guesty is providing a clear move to consolidate and simplify some of that work.

“There are about 700 different services and other things that go into short-term property rentals,” Soto noted when I asked him about this. “It would take me hours to go through it all with you.”

And indeed, the market itself is much bigger than what Guesty is currently working with. Soto estimates that there are around 7 million properties now collectively getting listed on these short-term letting platforms, speaking to the opportunity ahead.

Guesty very much got its start with Airbnb and that helped it not only establish what property managers needed, but also to forge a close relationship with Airbnb at a time when it wasn’t yet building many bridges to third-party services. Soto said Guesty built its own private API to use with Airbnb, and subsequently helped inform how Airbnb eventually built an API that others could use.

It’s still a trusted partner in that regard. Now that Airbnb is moving into multi-dwelling arrangements — that is, rooms in hotels (which will now expand with its HotelTonight acquisition), plus multiple apartments in single buildings for big groups that might want to secure bookings at several places at once — it will very soon be launching a tool for these kinds of listings. Guesty has helped in the building of that, too.

Still, the opportunity for short-term lettings is bigger than Airbnb itself these days. Booking.com and its many subsidiary businesses have made a big move into this area, as have many other companies, and Guesty now handles bookings on a number of “channels”.

Soto said on average, the number of bookings on its platform that are listing on Airbnb is 60 percent, with some vacation spots seeing the percentage much lower, and some urban markets seeing a much higher penetration.

Equally, there are a ton of companies that have been building technology to ease the process of listing and managing properties on all these platforms that include Vacasa, Turnkey, Airsorted, Kigo and many more.

This might be one of those cases where being an early mover in identifying a market opportunity has worked in a startup’s favor. Guesty’s strong work with Airbnb has helped the startup build stronger ties with those companies that hope to compete with it and give Airbnb a run for its money: Booking.com, Soto notes, is a premier partner these days.

“Guesty was the first to recognize the potential of the property management market and has quickly become a category leader with its vertical-oriented, end-to-end approach,” said Natalie Refuah, partner at Viola Growth, in a statement.

“Technology and AI continue to disrupt the innovation stack, acting as a catalyst to the digitization of ‘traditional’ areas such as real estate and travel. Guesty is leading the charge, fostering a more seamless experience for property managers while providing clear advantages to customers and ultimately, their guests. We believe that with its experienced and elite executive team, Guesty is fully equipped to modernize and revolutionize the property management ecosystem.” Refuah is also joining Guesty’s Board of Directors.

Amazon Pay inks Worldpay integration as it branches out in the wider world of e-commerce

Amazon rules the roost when it comes to e-commerce marketplaces in countries like the U.S., but today it’s announcing a deal that it hopes will be a start to its plan to have that same kind of ubiquity outside of its walled garden. The company has inked a deal with Worldpay for the latter to become its first acquirer.

This means that Worldpay — one of the more ubiquitous providers of payment technologies, processing 40 billion transactions worth some $1.7 trillion annually through 300+ payment options and 120 currencies — will now be offering Amazon Pay as part of that mix, so that any merchant can offer this as a payment and shipping option to its customers.

Importantly, this also could allow Amazon, over time, to layer on further services into the mix for merchants, which could potentially include netting third-party merchants into its popular Amazon Prime subscription scheme for free shipping and more.

“It’s a good question, but we’d prefer not to speak about our future plans,” Patrick Gauthier, VP of Amazon Pay, told TechCrunch when asked about Prime and whether it could become a part of the Worldpay offering. “Today the announcement is about the extension of our footprint. It will lead us into more opportunities to grow the value proposition for buyers and merchants, but I will reserve discussion about that for the future.”

The deal is being announced the same week that Worldpay had some other news of its own: it’s getting acquired by Fidelity National Information Services in a $43 billion deal. Asif Ramji, chief product and marketing officer at Worldpay, speaking to TechCrunch about the Amazon Pay news, confirmed that the acquisition will have no impact on this Amazon deal.

Gauthier said that the initial focus of the deal will be to cover digital payments mainly for online merchants, although not just on websites per se. “The focus is on the connected experience, and we are leaning into other kinds of connected devices,” he said.

The lure for merchants goes something like this: linking into Amazon Pay gives buyers an option to select from a list of active addresses and payment options that they will already be using to buy on Amazon. This, in turn, will make it less onerous to fill out details to complete the transaction — and therefore less likely for the sale to fall prey to the “shopping cart abandonment” that scuppers many an online transaction. That would be even more the case on screens where a user might not have a keyboard and inputting information is even more of a pain, such as on a TV.

To be clear, in a nutshell, this quicker process, added convenience and increased security (no need to re-enter card details) are the promised benefits of all digital wallets. Amazon’s unique selling point, however, is that its particular set of data is already widely used, and therefore more likely to be used again.

The other 95 percent

We once reported on some research that found that Amazon accounted for nearly half of all online commerce in the U.S., but only five percent of all retail spend. As a long-term plan to continue growing its business, Amazon has been working on ways to extend its reach outside of the world of Amazon.

While some efforts in areas like point-of-sale services, for example, have largely fallen flat, what’s interesting in this Worldpay deal is how Amazon is willing to concede a bit of control in its effort to change that track record and tap into that bigger market.

Ramji noted that Worldpay actually built Amazon a custom API to integrate Amazon Pay into its platform and to create the ability to tap into the data around shipping and cards that Amazon can subsequently provide to merchants. That implies that this will, for now at least, be something that only Worldpay will be able to provide to customers.

What’s also very notable in this news is how Amazon Pay / Worldpay might help Amazon bring in more transactions under its Amazon Prime subscription umbrella.

While Gauthier would not comment on whether Prime might be offered as an option at checkout at any point in the Worldpay integration, he did note that the company has quietly been testing using Prime outside of Amazon.

“As a matter of fact we have had instances of doing that already,” he said, noting that the fashion retailer All Saints currently provides the same Prime shipping benefits to its customers if they happen also to be Prime subscribers. “It has been very successful in terms of customer conversion and lift, and to capture new customers.”

He also noted that the company ran tests during Prime Day in 2018, testing using Prime with third-party merchants to understand the potential opportunity it might have here. “Yes, we have had interest from merchants if and when we decide to go further with Prime.”