#fintech

B2B Payments

The large addressable market and lack of technology adoption in B2B payments create significant growth opportunities for digital disruptors. Fintech companies that enable digitization of accounts payable and accounts receivable will likely drive workflow automation, increase productivity, and reduce labor costs and human error.

LLR has spent the last two decades investing in and helping to grow B2B software and payments companies, as outlined below. Companies and intermediaries working in this space should contact Ryan Goldenberg to discuss relevant investment opportunities.

To bridge the gap between buyers and suppliers, AP and AR departments need to embrace solutions that promote automation through direct integration and allow for a seamless exchange of data and payment flow. One study from 2018 found that if U.S. corporations moved from paper-based invoicing to automated electronic invoicing, $150B of cost savings could be realized.1

Ryan Goldenberg, Partner, LLR Partners

A FinTech Inflection Point

A Large and Growing Market

A 2018 study forecasted that global B2B payment volumes were expected to reach $200T over the next decade, 5x the size of the expected 2028 B2C market, representing a CAGR of 5%.1

The current revenue opportunity in the B2B payments market is estimated at $950B ($186B in North America), across all sub-sectors.1

Underpenetrated Opportunities

Digital adoption lags B2C significantly, with just 36% of B2B payments bring conducted electronically compared to 67% of B2C payments. In SMBs, 80% of B2B payments are still made by cash or check.2

Increasing Investment Signals an Inflection Point

From 2010 to 2018, nearly $13B of venture capital and private equity was invested in B2B payments, and 500+ total deals were completed.3

 

Bridging the Gap between AP and AR Solutions

To bridge the gap between buyers and suppliers, AP and AR departments need to embrace solutions that promote automation through direct integration and allow for a seamless exchange of data and payment flow.

In our view, the most effective AP and AR solutions have features such as:

  • Integration to the ERP or system-of-record
  • Buyer–supplier network portals to upload and manage invoices and payments
  • Streamlined payment acceptance
  • Dynamic payment capabilities allowing payors to modify payment delivery and modality based on variables such as recurring vs. one-time, supplier preference, and payment size

A Market Ripe for Technology Adoption

70%
4
of all invoices in the U.S. are still sent via mail
40%
5
of B2B payments are made by paper check
41%
6
of companies today have automated their payables or receivables systems

Get to Know LLR Partners

23+ Year History of Investing in Payments

  • Founded in 1999, LLR is a growth oriented private equity firm investing in high growth, disruptive technology companies.
  • Raised over $6.0 billion of capital across seven funds.
  • Thematic approach to partnering with leading solutions in attractive end markets, providing $25 – $150 million of equity to fund liquidity for early shareholders and accelerate long-term value creation initiatives.

Operational Support

  • Leverage best practices developed through codifying successful strategies across our 130+ investments.
  • Access the 40+ member in-house Value Creation and Market Development Teams with operational expertise across sales and GTM, customer success, finance and IT, human capital, market strategy, technology and M&A.

Focus on Partnership

  • Flexible capital provider (majority or minority ownership).
  • Reward and motivate key players with equity.
Select Industry Investments

LLR invests in the sectors where our investment experience indicates there are attractive business models and market trends supporting strong growth potential. Here are some of our related investments in B2B payments.

Industry GrowthBits

View All
#FinTech
A FinTech Inflection Point: Bridging the Gap between Accounts Payable and Accounts Receivable Solutions
Ryan Goldenberg / Partner
#FinTech
B2B Payments is an Underpenetrated Market at an Inflection Point
Ryan Goldenberg / Partner
#FinTech
Payment Processing and the Shift Towards Integrated Commerce
Ryan Goldenberg / Partner
#FinTech
Payment Security Market Driven by Growth of eCommerce and Fraud
Mitchell Hollin / Partner

See You There?

October 27, 2024
Money 20/20
Learn More
November 6, 2024
AAPP2P
Learn More

Meet the LLR Team

Mitchell Hollin

Mitchell Hollin
Ryan Goldenberg

Ryan Goldenberg
Sam Ryder

Sam Ryder
Connor Crump

Connor Crump
Connor Shaw

Connor Shaw
David Hessert

David Hessert
Cody Wax

Cody Wax
Robert Campbell

Robert Campbell

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References

  1. James Schneider, et. al. “B2B How the Next Payments Frontier Will Unleash Small Business,” Goldman Sachs, 2018, https://www.gspublishing.com/content/research/en/reports/2019/09/04/201b4777-6217-4638-9701-fb98d67d9d5d.pdf
  2. “Electronic B2B Payments – The Next Frontier,” SunTrust, 2021.
  3. “B2B Payments, Substantial Long-Term Global Opportunity Gaining Momentum”, William Blair, 2018.
  4. PYMNTS. “Deep Dive: Realizing AP Automation’s ROI.” PYMNTS, November 2019. https://www.pymnts.com/accounts-payable/2019/deep-dive-realizing-ap-automations-roi/.
  5. PYMNTS. “B2B Payments: 40% Are Made With Paper Check.” PYMNTS, March 2022. https://www.pymnts.com/news/b2b-payments/2022/b2b-payments-40-are-made-with-paper-checks/.
  6. PYMNTS. “Why 85 Pct Of Companies Want AP Automation.” PYMTS, 2019. https://www.pymnts.com/news/b2b-payments/2019/accounts-payable-ap-automation-innovation/
Disclaimer:

The information presented herein is intended for an audience of potential LLR portfolio companies and the intermediaries supporting their capital raise processes. Named LLR investments presented herein do not reflect a complete list of LLR investments and are provided for informational purposes only. Certain statements about LLR made by portfolio company executives and other quoted parties herein are intended to illustrate the work of LLR’s Value Creation Team with such portfolio companies or reflect the individual’s perspective on the featured industry sector. Such portfolio companies are controlled by investment vehicles managed by LLR. Quoted parties were not compensated in connection with their participation, although they generally receive compensation and investment opportunities in connection with their portfolio company or Senior Operating Advisor roles, and in certain cases are also owners of portfolio company securities and/or investors in LLR-sponsored vehicles. Such compensation and investments subject participants to potential conflicts of interest in making the statements herein.