Modulr’s ascent drives other businesses to new heights

Hid­den away in the entre­pre­neur­ial lessons taught in busi­ness schools, books and across the inter­net is a blind­ing­ly sim­ple premise to build­ing a suc­cess­ful com­pa­ny now and 100 years ago: solve a prob­lem and solve it well. Despite rapid tech­no­log­i­cal advances in the past cen­tu­ry, it’s still those ful­ly grasp­ing this premise who rise to the top.

Look no fur­ther than the founders of Mod­ulr, whose three-year CAGR growth of 430.39 per cent secures it sec­ond place in the inau­gur­al Accelerate50 awards by Dun & Brad­street. Though the pay­ments and bank­ing-as-a-ser­vice API (appli­ca­tion pro­gram­ming inter­face) plat­form* has brought excel­lent inno­va­tion to the mar­ket, it is its founders’ under­stand­ing of a prob­lem that has dri­ven its rapid ascent over the last five years.

The idea was born in 2015 in light of direct expe­ri­ences felt in the pay­ments sec­tor by chief exec­u­tive Myles Stephen­son and his fel­low founders, some of whom had pre­vi­ous­ly built Cor­po­ratePay, which was sold to US pay­ment pro­cess­ing firm WEX in 2012. Through that jour­ney, they faced sig­nif­i­cant chal­lenges in get­ting access to trans­ac­tion­al bank­ing ser­vices, both from a con­tract rela­tion­ship stand­point and inter­act­ing with tech­nol­o­gy.

“It was almost impos­si­ble,” says Stephen­son. “At times, there was a closed door for access­ing the ser­vices and, even if we could get through that door, we couldn’t build what we want­ed in the way we want­ed, requir­ing a lot of workarounds. It was clear­ly bro­ken and we realised if we were hav­ing prob­lems, know­ing pay­ments as we did, it must be even worse for the broad­er mar­ket. We knew it was a prob­lem we could solve.”

The weight of the prob­lem was com­ple­ment­ed by the scale of the oppor­tu­ni­ty. Hav­ing pio­neered vir­tu­al cards that enable com­pa­nies to pay sup­pli­ers in the trav­el indus­try at Cor­po­ratePay, sup­port­ed by APIs, tokeni­sa­tion and rec­on­cil­i­a­tion con­trols, Stephen­son and his col­leagues noticed grow­ing demand among clients to repli­cate the expe­ri­ence for the broad­er bank­ing and com­mer­cial trans­ac­tion mar­ket, which is five times the size of the con­sumer mar­ket, yet had lagged behind when it came to inno­va­tion.

“They were ask­ing us to do the same for bank-to-bank pay­ments, account pay­ments and inter­na­tion­al pay­ments,” Stephen­son adds. “We thought that sounds like a good idea, par­tic­u­lar­ly when we saw, even in sec­tors and clients with the most adop­tion of those ser­vices, we were typ­i­cal­ly only serv­ing 20 per cent or less of their pay­ment vol­ume, much less in oth­er indus­tries. We were leav­ing 80 per cent of the oppor­tu­ni­ty on the table and prob­a­bly up to 95 per cent of the oppor­tu­ni­ty in oth­er indus­tries.”

Digital alternative

To resolve the wide­spread frus­tra­tion across sec­tors, Mod­ulr got to work in 2015 cre­at­ing a dig­i­tal alter­na­tive to com­mer­cial and whole­sale trans­ac­tion bank­ing, pro­vid­ing dig­i­tal busi­ness­es with a scal­able and effi­cient pay­ments infra­struc­ture. Part­ners of Mod­ulr, mean­while, are giv­en the abil­i­ty to embed pay­ments, rather than resell third-par­ty solu­tions, so they can offer sec­tor-spe­cif­ic inno­v­a­tive solu­tions, ulti­mate­ly improv­ing their cus­tomer expe­ri­ence and scal­ing their own propo­si­tions.

Mod­ul­r’s plat­form deliv­ers auto­mat­ed pay­outs and sim­pli­fied pay-ins, and its API inte­grates accounts into any plat­form, so busi­ness­es can eas­i­ly launch new pay­ment ser­vices. In just five years, it has processed £50-bil­lion worth of pay­ments through its plat­form on behalf of cus­tomers and part­ners, rang­ing from oth­er fast-growth star­tups, such as Rev­o­lut and iwoca, which have been able to scale faster thanks to Mod­ul­r’s infra­struc­ture, to estab­lished enter­pris­es like Sage, and recent­ly signed Quick­Books, allow­ing small­er busi­ness and account­ing users to pay out on time 24/7, while improv­ing vis­i­bil­i­ty and elim­i­nat­ing man­u­al process­es.

Hav­ing focused pre­dom­i­nant­ly on the UK so far, tar­get­ing dif­fer­ent mar­ket ver­ti­cals, Mod­ulr is now look­ing to fur­ther accel­er­ate its growth in three mea­sured steps. The first is lever­ag­ing the rapid accel­er­a­tion of dig­i­tal trans­for­ma­tion across mul­ti­ple sec­tors to spread its ser­vices even fur­ther in the UK. The sec­ond, hav­ing spent con­sid­er­able time last year get­ting reg­u­lat­ed in Ire­land, is to expand into Europe. Final­ly, there is a sig­nif­i­cant oppor­tu­ni­ty to take its in-demand solu­tion fur­ther afield.

“We believe every soft­ware com­pa­ny can become a pay­ment com­pa­ny by embed­ding our ser­vices in it,” says Stephen­son. “You can apply it to so many mar­kets. As indus­tries con­tin­ue to dig­i­tal­ly trans­form, the oppor­tu­ni­ty to embed pay­ments opens up. It used to be that busi­ness­es would just go to their bank for pay­ments, but we see a bold world where they con­nect their soft­ware direct­ly into pay­ment rails and finan­cial ser­vices. There are still so many areas that are untouched, but we’re see­ing a glob­al shift towards embed­ded pay­ments real­ly start to emerge.”

Any­body can start a busi­ness, but real­ly scal­ing the com­pa­ny is far more chal­leng­ing. Mod­ulr has achieved this rar­i­ty and faster than near­ly every oth­er UK start­up over the last three years, by con­stant­ly refer­ring back to the prob­lems its cus­tomers face and the solu­tions they require to fuel growth. Though such insights are now prin­ci­pal­ly pow­ered by data, Modulr’s mis­sion to enable com­pa­nies to expe­ri­ence pay­ments how they want is fuelled by the pain­points its founders felt run­ning dig­i­tal busi­ness­es in the past.

“It goes full cycle back to why we start­ed the busi­ness, which is to pro­vide the flex­i­bil­i­ty and oppor­tu­ni­ty to inte­grate pay­ments into cus­tomer jour­neys and flows, so peo­ple can do things in a real­ly fric­tion­less way,” Stephen­son con­cludes. 

“We see that con­tin­u­ing to grow and evolve as cus­tomer expe­ri­ences con­tin­ue to change. We were for­tu­nate enough to expe­ri­ence our cus­tomers’ pain­points direct­ly and know how to build a unique solu­tion, and we’re ded­i­cat­ed to advanc­ing that even fur­ther. There are still many cas­es where it does­n’t hap­pen, so we will con­tin­ue to improve the pay­ments expe­ri­ence to ensure mon­ey flows effi­cient­ly through busi­ness­es and the econ­o­my.”

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