Dwolla announced today that it has raised $21 million in funding to continue to build out its strategic roadmap and to expand to markets outside of the U.S.
The round was led by Foundry Group. Additional investors include Park West Asset Management LLC, Union Square Ventures, Detroit Venture Partners, Firebrand Ventures and Next Level Ventures.
Dwolla has seen an 80% increase in transaction volume since the beginning of the COVID-19 pandemic. In 2019, Dwolla processed $11 billion in gross payment volume. In 2020, that number grew to $20 billion. This year, the company is expecting to exceed $35 billion in 2021, CEO Brady Harris told Clay & Milk.
“The first three months of the pandemic, it was a great time for us to relook at our core product and technology and where we wanted to fit into the payment space. So we went through a pretty methodical process internally and redefined some of our strategic roadmap,” said Harris. “That was good timing because our payment volume really started to drop precipitously as the pandemic took off and we really buttoned down the hatches and dial in our operational efficiencies. And then around Q3 and Q4, our payment volume came roaring back and it surpassed pre-pandemic levels and we’ve been able to ride that tailwind really nicely all the way through the fundraise.”
Over the last 12 months, Dwolla has pushed out several new product expansions including Real-Time Payments, Push-to-Debit and low-code Drop-in Components.
“Originally we set to raise about $50 million and thought that was the right number. But then as our financial model was changing during the fundraise, we realized we really didn’t need to raise as much money as we thought,” said Harris. The path to profitability and the ways we could expand the product using our own resources versus investor dollars continued to come down. So we ultimately settled on $21 million and think that’s the right number.”
To date, Dwolla has raised more than $70 million in capital. This $21 million is its largest round to date. Harris says he expects the company to raise a larger Series C round some time next year.