Payment processing company Flywire has raised $120 million in a Series E investment round led by Goldman Sachs, and has acquired a Palo Alto, Calif.–based payment software company.
The investment round included existing investors such as Temasek Holdings along with new investors Tiger Management and Adage Capital Management. It brings Boston-based Flywire's total venture funding to $260 million.
Flywire's acquisition of Simplee will add the health care payment-software company's 70 employees to Flywire's payroll, bringing Flywire's total headcount to 540 people across its 12 global offices. Flywire expects to add another 100 employees organically by the end of 2020, according to CEO Mike Massaro.
Additionally, the company will also invest in product, technology and its two newly acquired offices in Tel Aviv, Palo Alto and its existing Singapore location.
“This digital foundation enables us to develop vertical-specific applications that make payments more efficient and cost-effective for our global clients. The Simplee acquisition improves patient engagement and health care affordability and extends these capabilities to a broader customer base,” Massaro said in a statement.
Simplee had raised $36.4 million in venture capital funding prior to its acquisition by Flywire.
Founded in 2011, Flywire enables universities, hospitals and business-to-business companies to better transact in foreign currencies. It was started as peerTransfer in 2009 by Spanish entrepreneur Iker Marcaide to facilitate tuition payments from international students to universities. The company has partnerships with many US-based universities including Boston University, Carnegie Mellon, and Cornell.
peerTransfer became Flywire in 2015 and now works with hospitals and large firms that need international payment processing, although educational institutions make up over 80% of the company’s clientele. Flywire has processed over $12 billion in total payment volume for over 2,000 clients around the world.
Flywire’s play is that it cuts out the middlemen including card processing companies like Visa, MasterCard and Amex and payment processing companies like Paypal, Adyen and Square who transmit transactions. Its software connects banks directly to universities and hospitals – because of the volume of transactions processed, which is usually in billions, the company is able to offer lower transaction fees (1%-2% compared to 3%-5%) and also get better foreign exchange conversion rates.
This article first appeared on BostInno, an affiliate of the Boston Business Journal.