E-commerce payments company Braintree kicked off its international expansion only in October, but overseas transactions now account for one-quarter of its business and are largely responsible for a doubling of its payments volume. Braintree is now processing $8 billion in transactions annually, CEO Bill Ready said, putting the Chicago startup at the same level as payments darling Square.
Of course, Square and Braintree have fundamentally different business models, but as they both evolve they find themselves competing head to head. While Square has focused on the small business owner looking to accept credit card payments, Braintree is strictly an e-commerce and m-commerce company handling payments for some of the best-known startups in the business, including AirBnB, Uber, OpenTable, LivingSocial, GitHub and Fab.com.
The model is much more similar to PayPal or Chase Paymentech, which dominate the low-volume and the high-volume end of the e-commerce business respectively. Braintree, however, is trying to bridge the gap between the two. By providing advanced features such as m-commerce, foreign currency processing and high-volume scaling, Ready said Braintree is able to support companies from their birth as tiny startups to their emergence as huge international e-tailers.
Braintree began processing foreign currency payments shortly after its launch in 2008, and that’s been one of the key drivers of its growth. AirBnB, which signed up with Braintree shortly after it launched, was able to expand quickly overseas. That allowed AirBnB to head off potential competition from foreign companies emulating its business model, Ready said.
“That’s one of the big reasons startups want to work with us,” Ready told GigaOM. “Startups need to go international much more quickly than they used to. But in order to accept international payments you used to have to go to [a provider] that required you to have hundreds of millions in accounts.”
Until last year, though, Braintree only processed transactions for U.S.-based merchants. In October, after raising a $35 million Series B round, it went overseas, extending payment support to online merchants in Canada and most European countries. It expanded to Australia in November, and Ready said it plans to launch in Switzerland, Norway and Turkey this week, completing its European footprint.
Ready said that international push as allowed it land key overseas customers like Finland’s Rovio, the creator of Angry Birds. In just six months, Braintree has grown that business to the point its processing $2 billion in annualized transactions on foreign shores, Ready said.
Braintree has raised a total of $70 million and is primarily backed by NEA and Accel Partners. Ready said it has 150 employees, most of which are in its Chicago HQ and in two satellite offices in San Francisco and New York City.