Corporate card startup Parker launches with USD 157 mln

Monday 20 March 2023 10:22 CET | News

Parker, a startup offering a corporate credit card for ecommerce businesses, has launched with USD 157 million in equity and debt funding, much of which closed in 2022.


The company is described as a charge card for ecommerce with raised limits that are on average 10 to 20 times higher than traditional business credit cards. Parker’s solution is based in its underwriting process, which assesses cash flow so that ecommerce brands can have credit limits that make sense for their business; for example, up to USD 10 million in credit.

In addition, the company wants to offer payment terms that make sense in the context of ecommerce, with net terms on every transaction. For example, if a company buys something on March 1 and then on March 3, it can have net 30 or 60 days on each of those and not pay on that transaction until May 1 and May 3, respectively. Thus, instead of operating on a monthly statement, they offer the option of working on a daily or weekly statement.

The card’s creators believes Parker has a good opportunity to compete in the crowded credit card space that includes other venture-backed companies like Moss and Emburse. It is worth noting that corporate card companies like Brex, American Express and Ramp do a broad reach to startups and don’t niche down to a certain industry to focus on custom needs.


The business model

Parker’s revenue comes from interchange and transaction fees, and since its launch, has surpassed USD 300 million in transaction volume. It also has a run rate of close to half a billion USD, as the company says. Customers include Amour Vert, Italic, SpikeBall, Canopy and Caraway.

The company started raising venture capital after graduating from the Y Combinator in 2019 and is now announcing all its previously unannounced funding, most recently a USD 31.1 million in Series A venture funding led by Valar Ventures that followed a USD 5.9 million in seed funding. In addition is USD 70 million in debt, comprised of venture debt from Triple Point Capital and warehouse debt from Jefferies. The warehouse debt facility also includes an uncommitted option to upsize by USD 50 million.

The funding will be used for research and development across product, engineering, and go-to-market as it readies to expand across the US in 2023. Parker is also working toward profitability, and the company is working on scaling to access the cheaper cost of capital and upsell other products, though there can be a path to profitability on just the card business.

In the long run the company wants to become the de facto card for profitable ecommerce brands looking to scale. They want to build the best-in-class card experience and solve the problem space of cash flow, management, and profitability. Once they believe they met that goal, they will investigate expanding their product lines, including other financial products that brands might need.

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Keywords: credit card, ecommerce, funding, product launch
Categories: Payments & Commerce
Companies: Parker
Countries: United States
This article is part of category

Payments & Commerce


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