Retail and restaurant point-of-sale (POS) system provider SpotOn has raised $300 million in Series E funding, which will be used to acquire digital and mobile commerce platform Appetize while raising its own valuation to $3.15 billion.
SpotOn’s core product payments and management software product mainly caters to small and medium-sized businesses (SMBs). Appetize is more focused on enterprise businesses, such as sports and entertainment venues, theme parks, zoos and college campuses.
Doron Friedman, co-founder and chief product officer at SpotOn, told PYMNTS that the acquisition brings together two complementary companies, which will allow SpotOn to scale its technology offerings for clients.
“We know that we can grow with them no matter what the size of the business is, and we have all the tools they’ll need,” Friedman said. “If they’re going to grow from one, two, three locations to a chain of 1,000, we’ve got you covered. And it’s pretty amazing. It’s a great feeling.”
He added that Appetize also has features that can be integrated into SpotOn’s other offerings, such as an offline mode that allows businesses to continue running even if there’s a service outage. “You need a POS station talking to another POS station, and when you have no internet, how do you do that? How do you take a payment and make sure it goes through when you have no internet?” Friedman said. “They can do all that, and it’s pretty fast.”
Max Roper, CEO at Appetize, will continue running the business as part of SpotOn. The transaction is expected to close by mid-September. “This acquisition enables our combined team to accelerate investments into our core product and client base, while expanding to fill a void in the mid-market space,” he said in a statement. “By bringing the two companies together, businesses from a major league ballpark to a local clothing boutique will have access to modern, intuitive, cloud-based technology … from one trusted provider.”
The $300 million funding round was led by Andreessen Horowitz, with participation from other current investors, including DST Global, 01 Advisors, Dragoneer Investment Group, Franklin Templeton and Mubadala Investment Company, as well as new investors Wellington Management and Coatue Management.
The new funding comes just four months after SpotOn raised $125 million in Series D funding, which brought the company’s valuation up to $1.875 billion. That funding round was also led by Andreessen Horowitz; SpotOn had planned to use it to develop products and expand the company’s market placement.
Read more: SpotOn Raises $125M for SMB, Restaurant Payment Platform
Adapting and Evolving
SpotOn has seen more than 100% year-over-year growth, with revenue more than tripling in the last 18 months, which Friedman attributed to the company’s understanding of what it takes to run a business. Friedman, for example, started out as a restaurant owner and his brother started out in retail, “so we’re not a bunch of techies creating products,” he said. “We understand what it is to be an entrepreneur, what it is to own retail, what it is to own restaurants.”
Friedman noted that as SMBs worked to adapt over the last 18 months, SpotOn has tried to be a partner, providing restaurants and retailers with the ability to offer payment by QR code and helping some businesses, such as spas, create contact-tracing systems. “This is the hardest I think we’ve ever worked, because you have businesses where people’s life savings are on the line, employees’ jobs are on the line,” he said. “You’ve just got to do everything you can to help them succeed.”
With some of the biggest shifts already implemented, though, SpotOn is also looking at other ways to make payments easier for businesses and consumers. One area of note, Friedman said, is expanding the ability to pay with cryptocurrency. Millions of people have crypto, he noted, “and a lot of these folks have done pretty well, as you can imagine, and they want to use some of that money. So, we’re going to make that possible.”
According to PYMNTS research conducted in collaboration with BitPay, 60% of cryptocurrency owners are interested in using crypto to make online purchases that are more secure, and nearly 57% said they would be interested in using gains from investments to make a big purchase rather than cashing out.
See also: Nearly 60% of Consumers Want to Buy Stuff With Crypto
Friedman said that SpotOn has also heard from some restaurants and businesses that want to be able to accept cryptocurrency and perhaps keep some of their revenue in that form. “I think everything is evolving, and you just have to make it available for people to pay any way they’re comfortable paying.”
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