There are countless options for SaaS platforms to collect payments from their customers within their applications. But what if the application is designed to enable clients to accept payments from their customers. PayEngine is a payment platform that seamlessly integrates into SaaS applications to directly address this. SaaS businesses using PayEngine are able to set rates, creating margin, without adding liability as merchant of records or in cases of disputes/chargebacks. The solution is designed uniquely for vertical software market vendors after the company identified this payment infrastructure gap in this market.
LA TechWatch caught up with CEO and Founder Spartak Buniatyan to learn more about the inspiration for the business, the company’s strategic plans, recent round of funding, and much, much more.
Who were your investors and how much did you raise?
The round was led by Mucker Capital with participation from BAM Ventures, I2BF Global Ventures, HIVE Ventures, and other strategic investors. It was a seed round.
Tell us about your product or service.
PayEngine is a white-label payments platform designed to help vertical market software vendors maximize payment revenue, eliminate liability and reduce complexity, and own and improve customer experience. With PayEngine, vertical SaaS businesses can increase ARR by up to 30% overnight by allowing companies to set their own rates directly over interchange and retain the majority of profits, without having to worry about the merchant-of-record liability or implementation complexities traditionally associated with other payment facilitation models.
What inspired the start of PayEngine?
We have been seeing the struggle that vertical software companies go through in trying to make sense of the payments space. Nearly all current payment facilitation companies offer solutions that were not originally built for software companies serving vertical marketing, and instead attempt to shoehorn in solutions that are not the right fit for what these software vendors need.
How is it different?
Most of the current payment facilitation models were born out of a need for marketplace payments, where the software vendor acts as a reseller in-between the consumers and the businesses. The vertical software model is different in that software vendors are not typically required to be in the money flow between their merchants and their merchants’ customers. Having worked closely with some of the industries’ software giants and after carefully evaluating the challenges that traditional payment facilitation models impose in vertical markets, we recognized the need for our product.
What market you are targeting and how big is it?
We’re specifically targeting vertical software markets only. Our software brings a lot a value to any software vendor who fits a B2B2C model.
What’s your business model?
We’ve designed our business model from the ground up to be aligned with our customers’ incentives. Based on our customer needs, we can offer them a SaaS pricing model, or a revenue share.
How has COVID-19 impacted the business??
We’ve had to find ways to work as a remote team like most other companies, which, while challenging at first, has yielded some nice benefits such as having everything completely digitized and creating a streamlined onboarding process for any new team members.
What was the funding process like?
Our funding process was pretty smooth, actually. We strategically only took funding from VCs that have deep knowledge and experience of the vertical software space.
What are the biggest challenges that you faced while raising capital?
As an early-stage startup, it’s always finding the balance between all the activities required to keep building the business while also venturing into the capital-raising activities, which in itself becomes a near full-time commitment.
What factors about your business led your investors to write the check?
We were fortunate enough to garner interest from customers who were already part of the investors’ portfolio of companies. This created a nice circular product-market-fit validation point for our investors.
We were fortunate enough to garner interest from customers who were already part of the investors’ portfolio of companies. This created a nice circular product-market-fit validation point for our investors.
What are the milestones you plan to achieve in the next six months?
International expansion is currently on the shortlist of our top activities.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Do as much product-market-fit discovery outreach and calls as possible. The more you can de-risk before your reach out to investors, the better your chances of gaining traction and commitment from them.
Where do you see the company going now over the near term?
We’re currently focused on providing the best technology and experience possible for our customers.
What’s your favorite outdoor activity in LA?
Running in the morning, and spending time / walking with my wife and 9-month-old son.
