To date, the startup has raised $22 million.
To date, the startup has raised $22 million, with its most recent round led by Index Ventures.
Mercantile, a new fintech startup that offers credit cards to small businesses, is launching publicly today following a $15 million funding round. It aims to leverage professional associations to win over a market typically skeptical of adopting new technologies. Mercantile plans to use its professional associations to convince small businesses to adopt its new credit card technology. With $15 million in funding, the startup is off to a strong start.
The Mercantile company has raised $22 million to date in order to help fund its new project: professional association-branded cards for business owners. This new venture will allow business owners to access the market through trusted professional associations, of which the American Optometric Association (AOA) is one example. Mercantile plans to expand its reach to other industries beyond healthcare, and will share any revenue generated through interchange fees with its professional association partners. This is a smart move that could potentially help many business owners get the funding and support they need.
It's great to see industry players working together to help each other out. In this case, Mercantile is working with other companies to help them acquire new card holders. This shows that companies are willing to help each other grow and succeed.
Poirier is no stranger to startups. At 17, he founded the first bitcoin debit card. It eventually merged with Mt.Gox, a leading crypto exchange that, in 2014, became the victim of the largest bitcoin hack in crypto history. After that, he founded a VR analytics company and then a cruise-booking service. Mercantile is his fourth company. Poirier's experience with startups and his success in founding multiple businesses makes him well-suited to leading Mercantile. His track record shows that he has the vision and determination to build a successful company.
Mercantile is a new player in the corporate credit card space, targeting small businesses that have traditionally been underserved by incumbent providers. Mercantile aims to provide industry-specific benefits that these small businesses need in order to compete, something that the larger banks have been unable to do. This could be a game-changer for small businesses, and we're excited to see how Mercantile grows in the coming months.
The corporate card market is becoming increasingly crowded as fintech players vie for market share. Brex, Ramp, Mercury, and Rho are all jockeying for position, with each company offering its own unique product. Brex recently announced that it would be closing the accounts of small-to-medium-sized businesses, however, as it shifts its focus to enterprise clients. Rho, on the other hand, focuses on mid-sized businesses with revenues between $10 million and $1 billion. And Ramp targets a wide range of businesses. With so many options now available, businesses will have to carefully evaluate which provider best meets their needs.
Mercantile is a unique company that offers a white label card and focuses on reaching small businesses through professional associations. The company's corporate card is also a revolving credit instrument, instead of a charge card that must be paid off in full every month. Mercantile's card is offered through a partnership with Hatch Bank, a subsidiary of Firstrust Savings Bank. This makes Mercantile a great option for businesses who want to build credit and access financing.
Mercantile is a novel company that plans on managing "group purchasing orders" for businesses. In healthcare, providers typically pool their purchasing power through a group purchasing organization to negotiate discounts with vendors of critical supplies. Mercantile plans on taking over these negotiations to secure better discounts for their card users and generate revenue through vendor kickbacks. This is a great business model that will help businesses save money and get the best possible deals on critical supplies.
Mark Fiorentino, a partner at Index Ventures and Mercantile investor, believes that the unit economics of a card business are more compelling in the long term when a group purchasing organization is able to get a kickback percentage. He says that this is due to the fact that interchange is helpful, but the kickback percentage is what makes the difference in the long term.
With the rise of privately funded companies with more resources, group purchasing organizations have become more important for small businesses. These organizations help small businesses compete by negotiating better deals and providing them with the resources they need to succeed. Mercantile believes that by taking over the negotiation piece, it will help small businesses even more. This will allow them to compete against better-capitalized competitors and continue to grow.
As a small business owner, I can attest to the difficulties of managing vendor relationships. It's a big issue for us because we don't have the time or resources to dedicate to it like larger businesses do. I appreciate that Mercantile is trying to help us with this, and I hope that their efforts will make a difference for small businesses across the board.