Two-sided things need to be balanced, whether they are seesaws, scales, or marketplaces.
Balanced, a provider of backend payment solutions specifically geared towards online marketplaces and networks, has added $2 million into its seed round, bringing its total to $3.4 million. Andreessen Horowitz participated in this round, led by general partner Jeff Jordan who formerly worked as the president of Paypal.
“By focusing on networks and marketplaces, we are targeting one of the hardest types of e-commerce,” said founder Jareau Wade in an interview. “There are two sides you have to worry about, and this is important because the value of a marketplace is in a unique and broad inventory. Also, two-sided platforms specifically encourage fraudulent activity and there are significant compliance issues because these networks are risky. We want to continue fulfilling our goal of making Balanced the ideal payments solution for the toughest type of ecommerce model”
Balanced’s API makes it easy to set up a double-sided transaction model. The technology processes payments, holds those funds in escrow, and initiates payouts through one integrations. Everything happens behind the scenes, so consumers do not need to have a Balanced account, and the company takes care of accounting and operations, fraud, compliance, and international currency conversion.
Balanced first started as PoundPay and participated in Y Combinator’s Winter 2011 class. In November of 2012, the company publicly launched and announced a seed round of $1.4 million from Ashton Kutcher, AirBnB CEO Brian Chesky, Yishan Wong, Y Combinator, and SV Angel.
Since then, Balanced has seen significant growth growing an average of 30% each month, and 37% over the past two months. 112 new marketplaces have activated production Balanced accounts since March 1st, 2013, as well as businesses outside this niche such as ad networks. This new traction attracted new investors. In addition to Andreessen Horowitz, Collaborative Fund and several Facebook alumni.
While there are many players in the payments space, most notably Stripe, Braintree, and PayPal, Wade said that Balance’s unique focus and expertise on two-sided payments distinguishes it from the pack. Clients include Reddit, GroupMe, Vungle, and Crowdtilt.
Balanced has ten employees and is currently based in San Francisco.