Zeller raises $50 million to expand small business banking solution

Small business-focused fintech Zeller has secured another $50 million in funding, bringing its total capital raised to more than $81 million within 12 months.

And while the news is only being made public today, the investors signed on the dotted line just a few days before Zeller launched in early-May.

According to the fintech, that made it Australia’s most valuable pre-launch startup ever, with a post-money valuation of $400 million.

The latest funding round was led by US-based VC Spark Capital, and also included repeat backing from Square Peg, Apex Capital Partners and Addition.

It follows a $6.3 million raise 12 months ago, and another $25 million round in March 2021.

It was just six weeks ago that co-founders Ben Pfisterer and Dominic Yap sent their suite of finance solutions out into the world, providing SMEs with a platform for accepting payments, a finance management system and a transaction account with a business mastercard.

Zeller brought about 1,500 businesses on board within the first month, Pfisterer tells SmartCompany, and payment volumes continue to increase by 200%, week-on-week.

That result was “well above expectations,” he adds.

“It’s been ridiculously exciting … You get to the point where you’re racing towards what seems like a finishing line. The closer you get, you quickly realise it’s actually the starting line.”

Next steps

This is another significant chunk of capital for a business that was already well financed, however, Pfisterer says in the run-up to Zeller’s launch, he went back to his previous investors with two options.

He could continue focusing on growing the business they had built the foundations for, or he could go deeper into building new financial services.

“It was unanimous that they had seen enough in terms of our ability to execute,” he says.

“Let’s just get moving on scaling and building new products.”

The new funding will fuel innovation and the building of those new parts of the business, which will also require an increase in headcount.

The business is scaling fast. The manufacturing and distribution processes have been ramped up to meet demand, and the customer support team has grown too.

The next few months will also see Pfisterer and the team looking inwards too. Now Zeller has customers, it’s starting to get feedback from them, which it plans to use to refine and shape its product.

“We don’t believe in launching a product, holding it out there and hoping it works,” Pfisterer says.

“We need that feedback from businesses — what do you want? What’s the next iteration? How can we improve it?”

No exit

The past 18 months or so has seen a flurry of fintech activity in Australia, with many startups treading the path towards the ASX.

Pfisterer says that’s not where Zeller is heading, at least not anytime in the near future, and all of its investors are in it for the long-term.

“We want to be a multi-generational business. We don’t want to just quickly scale towards an exit,” he says. 

The founder doesn’t see an IPO as an end goal, or a sign of success. He simply wants to have enough capital to be able to grow the business to where it needs to be to best help its customers.

If listing makes sense in the future, “so be it,” he says.

“But we’re well capitalised with great investors, so it’s not required at the moment.”