Modulr, a UK Payments-as-a-Service API platform for digital businesses, has raised £18.9 million in a funding round led by Highland Europe.
Frog Capital and Blenheim Chalcot participated in the round, which brings Modulr's total funding to £53.3 million.
In the four years since its founding, Modulr has established itself as a digital alternative to traditional banks in the wholesale and transaction payments market, which moves $120 trillion each year.
Last year, the firm became one of the few non-banks to gain direct access to Faster Payments and Bacs, as well as becoming a principal issuing member of Visa in 2020.
Modulr is specifically targeting the $2.7 trillion incurred through administrative costs - 80% of which is paid by small businesses relying on "old and clunky incumbent banking infrastructure".
The startup claims its digital payments infrastructure disrupts this, by automating business payment flows, embedding payments into platforms and enabling businesses to build new payment products and services themselves.
The latest funding will be used for a push into new products and services, beginning with card issuing, as well as an expansion into new markets.
Myles Stephenson, CEO, Modulr, says: “In the past year, we’ve experienced strong growth, we’ve gained direct access to key payments infrastructure and have positioned ourselves as a trusted payments partner for some of the most ambitious companies in the UK and beyond.
“With Highland Europe, we have a partner which can help to further fuel this momentum, investing in our infrastructure and product suite to ensure we can provide our customers with a reliable service that’s easy to access and simple to use."