When Privacy.com was based in 2014, the corporate’s focus was to let anybody generate virtual and disposable payment card numbers for free.
The purpose was to permit these customers to preserve customers’ precise bank card numbers secure whereas permitting the choice to lower off corporations from their financial institution accounts. In an age of near-constant data breaches and credit card skimmers focusing on unsuspecting web sites, Privacy.com has made it tougher for hackers to get anybody’s actual bank card particulars.
The idea has appealed to many. At the time of its $10.2 million Series A final July, Privacy.com mentioned it had issued 5 million virtual card numbers. Today, that quantity has greater than doubled, to over 10 million, in accordance to CEO and co-founder Bo Jiang.
“We set out to create the safest and fastest way to pay online. Our mobile app and web browser extension lets you generate a virtual card for every purchase you want to make online,” Jiang defined. “That can be especially convenient for things like managing subscriptions or making sure your kid doesn’t spend $1,000 on Fortnite skins.”
Over the years, the New York-based firm realized the worth within the technology it had developed to situation the virtual and disposable payment cards. So after beta testing for a 12 months, Privacy.com launched its new Card Issuing API in 2020 to give company clients the flexibility to create payment cards for their clients, optimize back-office operations or simplify disbursements.
The early progress of the brand new card issuing platform, dubbed Lithic, has prompted the startup to shift its business technique — and rebrand.
In the method of constructing out its shopper product, Privacy.com ended up constructing a variety of infrastructure round programmatically creating cards.
“If you think about the anatomy of credit/debit card transactions there’s a number of modern processors such as Stripe, Adyen, Braintree and Checkout,” Jiang instructed TechCrunch. “On the flip side, we’re focused on card creation and issuing, and the APIs for actually creating cards. That side has lagged the card acquiring side by five to seven years…We’ve built a lot to support card creation for ourselves, and realized tons of other developers need this to create cards.”
As a part of its new technique, Privacy.com introduced as we speak that it has modified its identify to Lithic and raised $43 million in Series B funding led by Bessemer Venture Partners to double down on its card issuing platform and new B2B focus. Index Ventures, Tusk Venture Partners, Rainfall Ventures, Teamworthy Ventures and Walkabout Ventures additionally participated within the financing, which brings Lithic’s complete raised to date to $61 million.
Privacy.com, the corporate’s shopper product, will proceed to function as a separate model powered by the Lithic card issuing platform.
Put merely, Lithic was designed to make it easy for builders to programmatically create virtual and bodily payment cards. Jiang is inspired by the platform’s early success, noting that enterprise issuing volumes tripled within the final 4 months. It competes with the likes of bigger fintech gamers similar to Marqeta and Galileo, though Jiang notes that Lithic’s goal buyer is extra of an early-stage startup than a big, established firm.
“Marqeta, for example, goes after enterprise and is less focused on developers and making their infrastructure accessible. And, Galileo too,” he instructed TechCrunch. “When you compare us to them, because we’re a younger company, we have the benefit of building a much more modern infrastructure. That allows us to bring costs down but also to be more nimble to the needs of startups.”
The advantages touted by Lithic’s “self-serve” platform embody having the ability to “instantly” situation a card and “accessible building blocks,” or what the corporate describes as centered performance so builders can embody solely the options they need.
Another profit? An alternative for a brand new income stream. Developers earn again a share of interchange income generated by the service provider, in accordance to Lithic. “What we’ve noticed is a lot of folks have really big ambitions to build more of a stack in-house. We offer a path for folks by bringing more of a payments piece of the world that they can build for scale,” he mentioned. “As a result of all these things, we end up not competing head to head with Marqeta, for example, on a ton of deals.”
The firm expenses a charge per card for Lithic API clients (it’s free for Privacy.com). And it makes cash on interchange charges with each choices.
For Charles Birnbaum, associate at Bessemer Venture Partners, the shift from B2C to B2B is a brilliant technique. He believes Lithic is constructing a essential piece of the embedded fintech and funds infrastructure stack.
“We have been big fans of the Privacy.com team and product since the beginning, but once we started to see such strong organic growth across the fintech landscape for their new card processing developer platform the past year, we just had to find a way to partner with the team for this next phase of growth,” he mentioned.
Index Ventures associate Mark Goldberg notes that as each business turns into a fintech, there’s been an “explosion” in demand for on-line funds and card issuance.
“Lithic has stood out to us as being the developer-friendly solution here — it’s fast, powerful and insanely easy to get up-and-running,” he mentioned. “We’ve heard from customers that Lithic can power a launch in the same amount of time it takes an incumbent issuer to return a phone call.”
Lithic plans to use its new capital to develop the instruments and tech it affords to builders to situation and handle virtual cards in addition to improve its Privacy.com providing.