Profitable Billtrust Takes $25M to Supercharge Growth

Billtrust may be in the unglamorous business of outsourced bill processing, but Bain Capital Ventures finds it so irresistible, it’s provided the company with $25 million in funding.

How to explain Billtrust’s appeal? For one thing, the Hamilton, N.J.-based company works with more than 1,000 customers – from big fish like New Balance and Kraft Foods to smaller businesses with thousands of accounts — to drag their tired, paper billing and payment processes out of the 20th century and into the electronic age.

Thanks to three acquisitions that 11-year-old Billtrust has made in recent years, the company covers a wide number of verticals, too, including the country club industry; (via its purchase of Statement Services of Tampa, Fla.), wholesale distribution companies like electrical and plumbing suppliers (via its purchase of Invoice Connection of Carlsbad, Calif.), and the municipality market (via its purchase of Mark Altman & Associates of Hudson, Mass.).

Now Billtrust, which has been growing 50 percent per year, is ready to bite off much more, says founder and CEO Flint Lane. It’s why the company just raised fresh capital from Bain —  which beat out 15 other firms in a recently held bidding process conducted by the investment bank Raymond James.

Indeed, Lane says Billtrust sees a number of opportunities it is ready to begin chasing and that it’s likely to begin acquiring “one to two” new companies a year toward that end.

One of those opportunities, he says, is “primarily in the print world. We believe we can acquire these print companies and drive [their customers[ to electronic billings,” creating a tidy difference between “what we have to pay and what they will be worth” owing to the higher margins Billtrust will enjoy once their customers move away from paper. (A biller’s biggest expense is producing each paper bill and paying for its related postage, including return postage, which costs about $1 altogether.)

There are also plenty of “upsell opportunities” to pursue, says Lane, including around accounts payable departments (an area of focus for a number of software giants like Ariba) and in the credit and collection space, areas that Billtrust hasn’t worked with historically.

Eager to acknowledge Billtrust’s new financial backer, Lane says that Bain Capital Ventures should meaningfully help Billtrust on both fronts, given the virtual Rolodex and “payments expertise” of the Boston-based affiliate of Bain Capital. (Other payments companies in Bain Capital’s portfolio include Pittsburgh-based Dynamics, a next-generation payment technology startup that raised $35 million led by the firm in February.)

Asked if an IPO is also now on the horizon, given the substantial amount of money Billtrust has raised (its only previous round, of $4 million, came from Edison Ventures in 2006), Lane suggests that it’s a strong possibility, though not a priority.

“If we execute well, we’d perhaps want more capital for acquisitions, and going public would be an easier way to access it…but we haven’t made any decisions,” says Lane.

Photo: Image courtesy of Shutterstock.

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