Last year, Frog portfolio company Modulr—the Payments-as-a-Service API Platform for digital businesses—announced big news that they have secured £9m in funding from PayPal arm, Paypal Ventures. Today, in a recent interview with Senior Partner Mike Reid, Modulr Chairman Rob Devey shared his insights on the strategic investment and going forward.
He said that Modulr’s progress has been “fantastic” over the past few months and he’s pleased to say that the company has had an exceptional year in 2020. “We had a small impact for a couple of months around March, April, and May, but we’ve come bouncing back. Transaction growth has continued to be having monthly growth rates—at the rate that most people would wish for annual growth rates.”
Asked about his thoughts on what might have attracted Paypal to invest into the business, he shared: “I think Modulr is a fascinating case study. It’s hard to disrupt the big incumbent banks, which is where all the flow is. So if you are starting to disrupt those banks and starting to peel away some of the transactional volume as Modulr have been, you get on the radar screen. And when you’re thinking, in Europe, of hundreds of billions of dollars of business like PayPal, you’re thinking, how do I go to the next markets and continue to grow?”
“The business to business (B2B) market is an order of magnitude larger than the consumer markets so let’s start there and we’re going to start from scratch. It’s a complicated place. Now let’s try and find a platform where we can at least learn and we’ll see where we go from there. So that was the rationale for PayPal, as far as I’m aware.”
Devey then noted that scaling does not come without its fair share of challenges. Currently, Modulr operates in four different cities in Europe.
He said: “But those are the things that make life interesting and make it hard. I’m a great believer, I guess, that things that are hard are actually really, really valuable because the nature of them being hard means there’s a barrier to entry. If it was easy, everybody would be doing it.”
About the author
Mike launched Frog in 2009, after seven years in industry and 12 years at 3i. He represents Frog on the boards of Clue, Evotix and Modulr.