Unique Payments Fintech Butter Raises $22 Million Series A Round

Butter, a payments Fintech that tackles transaction churn, has raised $22 million in a Series A funding round led by Norwest Venture Partners! Existing investors also participated in the round, including Atomic, Transpose Platform, and Spring Tide Capital. Butter CEO and founder Vijay Menon revealed the funding in a blog post today, noting it was exceptional to raise money in the very difficult economic environment where venture capital has tanked. While not providing a valuation, Menon called the funding a “gift” and testament to what his company is doing.

Menon noted that accidental churn is the “single leading cause of subscription churn, resulting in nearly $500 billion in lost revenue on account of false declines per year.” As merchants and payment providers look to stop fraud, many payments are being declined with false positives. When a consumer checks out, Butter highlights there are about 128 different data elements that can be presented to complete a transaction. The challenge of churn is an issue that many companies do not realize it even exists – nor how to fix it. Enter Butter.

Menon explains:

“Payments fail for a variety of reasons – from stolen cards (legitimate) to processor error (not legitimate). Being able to parse through the metadata in real-time to make intelligent decisions around which transactions should and should not be authorized is not an easy task, and subscription businesses today are not equipped to handle this challenge at scale. Butter has built a Recovery engine powered by machine learning that automates these decisions in real time so that you don’t have to.  Every company in the world that transacts digitally is losing revenue to accidental churn.  These organizations each stand to add at least five points to top line revenue. Our vision is to help every e-commerce business on the planet realize this growth. It’s an ambitious goal, but one we firmly stand behind – after all, we’re already delivering this value and more to the customers we serve today.”

Apparently, Butter is performing well enough to raise risk capital during a time when many VCs have hit the pause button.

Butter last raised capital, $7 million, in December of 2o21, mostly from Atomic.

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