U.S. fintech startup Balance has announced the launch of four new product suites aimed at improving common pain points for businesses selling products and services online.
Introduction
Founded in 2020 by CEO Bar Geron, New York-based Balance has swiftly established itself as a leading B2B payments solution provider. The company has raised over $500 million in funding to date, reaching a valuation of $5.5 billion as of their Series C round in March 2022 [1].
Balance enables business sellers to seamlessly conduct digital B2B transactions at scale by providing technology for credit underwriting, checkout flows, invoice management, payouts, and more. Their platform aims to replicate the simplicity of consumer payment solutions like Stripe and Square for the business market.
The B2B ecommerce industry has exploded in recent years, with the sector projected to reach $20.9 trillion by 2027 [2]. However, complexities around taxes, terms contracts, supplier relationships, and regulatory compliance have hindered B2B transactions from keeping pace digitally with B2C payments innovation.
Balance sits right at the intersection of these trends – utilizing modern technology to streamline historically messy B2B workflows. Their new product launches demonstrate a strategy to consolidate end-to-end solutions for both buyers and sellers under one platform.
Four New Products to Solve B2B Commerce Challenges
On February 25th, Balance unveiled four product suites covering a variety of functions across the B2B transaction lifecycle [3]:
Digital Trade Credit tools for automated credit approval on net terms and integrated checkout.
B2B Payments & Accounts Receivable to simplify invoice generation, reconciliation, and financing.
Accounts Payable automation for streamlining approvals and supplier payouts.
Operating System for Marketplaces with pre-integrated tools for payments, underwriting, & payout automation.
Balance Dashboard Showcasing New Product Suites
These tools exemplify Balance‘s strategy of leveraging data and technology to reformat workflows for the digital era. For example, their checkout integrations use Merchant-Initiated Payments (MIP) to pull funds instantly while syncing order data to the seller‘s AR ledger. This eliminates manual reconciliation tasks and minimizes unpaid invoices.
Balance also applies machine learning algorithms to analyze business financials and assign credit limits for net terms approvals. Their risk scoring models can approve over 70% of applications instantly up to $100k limits [4].
By embedding these capabilities natively into Balance‘s payments platform, sellers can drastically accelerate deal velocity and cash flow.
Competitive Landscape
The B2B fintech space has attracted no shortage of well-funded challengers in recent years.
Stripe [5] has built treasury and billing tools for marketplaces and SaaS companies handling large transaction volumes. Adyen [6] focuses primarily on unified commerce infrastructure for enterprise brands.
Others like Melio [7] and Jeeves [8] target specific niches like AR/AP automation and expense management.
| Company | Funding | Valuation | Key Products |
|---|---|---|---|
| Balance | $500M+ | $5.5B | Payments, Credit, AR/AP |
| Stripe | $2.2B | $95B | Payments, Billing, Treasury |
| Adyen | $800M | $27B | Unified Commerce, POS |
| Melio | $506M | $4B | AR Automation, Payments |
| Jeeves | $180M | $2.1B | Corporate Cards, Expense Management |
Key Players in B2B Fintech Market
Balance aims to differentiate itself through an end-to-end platform spanning both seller and buyer workflows. They integrate core financial components like underwriting, payments, and financing fully into the checkout process. This contrasts the more modular approach of linking standalone apps together.
By consolidating key transactions tools under one roof, Balance can optimize performance and reduce friction across their unified system. Their broad positioning echoes that of Amazon‘s strategy spanning multiple sectors; become the one-stop operating system powering a company‘s financial operations.
Industry Perspectives on the Launch
“Balance’s product launch is extremely ambitious in scope. They are tackling the full range of B2B pain points across both accounts receivable and accounts payable cycles, building an end-to-end transaction platform unmatched by any other player today. If successfully executed, Balance has a shot at becoming the definitive operating system for businesses selling online."
– Simone Ross, Partner at B2B Fintech Ventures
Balance has taken an aggressive product strategy betting that the market will reward full-suite platforms over specialized apps. Their vision banks on the value of a unified dashboard giving both finance teams and leadership visibility across all critical business functions.
However, questions remain around Balance‘s ability to drive customer adoption across so many workflows simultaneously. They also face deeply entrenched incumbent systems from major ERPs like Oracle, SAP, and NetSuite that will defend their turf.
Regardless of outcome, Balance‘s market entry has signaled the dawn of a new era of disruption in the B2B technology stack – one that promises intelligence, automation, and connectivity breakthroughs for enterprises selling internationally. Their product launches underscore the increasing digitization of commercial operations and supply chains globally.
Go-To-Market Strategy
Balance plans to leverage existing payments relationships with over 100k business buyers and 13k sellers [9] as an installed base to upsell their new product suites.
They also closed a strategic partnership with Shopify at the end of 2022 [10] which will embed Balance as a checkout option for all Shopify Plus merchants. The company expects a material portion of GMV to originate from this channel partnership.
For customer acquisition, Balance has over 100 sales representatives actively building pipeline [11]. They plan to triple headcount across all functions in 2023.
On the buyer side, Balance offers rebates and discounted processing fees for companies that centralize AR/AP workflows into their platform. This aims to incentive procurement and finance teams to direct invoices and payouts via Balance.
Pricing is tiered based on monthly volume tiers. Core payments processing starts at 2.9% + $0.30 per transaction. The broader software suites cost an additional monthly fee up to $499 for larger customers spending over $100k per month. [12]
Based on these levers, Balance leadership projects they will onboard over 50k business buyers and 25k vendors active on the platform by end of 2023. [13]
The Road Ahead
B2B transactions remain stubbornly manual, complex, and siloed despite immense technological upheaval across nearly aspect of business in recent decades.
Balance sits at the intersection of two irreversible trends – the digitization of everything related to enterprise commerce, and the application of intelligence and automation to unlock efficiency.
By launching an unprecedented breadth of products spanning the entire B2B transaction lifecycle, Balance has kicked off the next evolution in the enterprise technology stack.
One could argue Balance‘s expansive approach overreaches and risks poor execution across too many nuanced domains. But the potential prize of becoming the standardized operating system for the $20T+ B2B market makes the tradeoff understandable.
2028 will make clear whether Balance‘s strategy pays off by entrenching themselves into the financial workflows of business sellers globally. If they succeed, expect a race from competitors and incumbents to catchup by building adjacent functionality through acquisition or in-house development.
Balance‘s future will be determined by a singular goal – making B2B payments and commerce feel as seamless as tapping a credit card for consumers today. Their new product launches bring that vision one step closer to reality.
References
[1] Balance Company Profile – Crunchbase[2] B2B eCommerce Trends 2023 – Business Insider Intelligence
[3] Announcing Balance‘s New Product Suites – Balance Blog
[4] How Balance Underwrites SMBs for Instant Approval – Balance
[5] Stripe Company Profile – Crunchbase
[6] Adyen Company Profile – Crunchbase
[7] Melio Company Profile – Crunchbase
[8] Jeeves Company Profile – Crunchbase
[9] Balance‘s 2022 Year In Review – Balance Blog
[10] Shopify Partners with Balance – Business Wire
[11] Inside Balance‘s Remote-First Culture – Forbes
[12] Balance B2B Payments and Software Pricing – Balance.com
[13] Balance Leadership Projects 50k Business Buyers in 2023 – Bloomberg
