Veem is a next-generation global payment provider that enables businesses to quickly and securely send and receive payments in local currency. Its 300,000+ SMB customers rely on the business for a variety of payment-related services.
SMBs go through many hassles as they deal with payments, especially when paying across various currencies. Many still rely on old-fashioned processes like cutting checks, sending wires, and using paper invoices.
Veem’s SaaS application tears up all those old-fashioned processes, allowing SMBs to do payments, payables, receivables, domestic, and cross-border, all within a single service.
- 300,000 customers spread out over 110 countries
- Support for 70+ local currencies
- In business since 2014
300,000 SMB Customers in 110 Countries
Veem’s growth over the past eight years has been exceptional, so that the company now has a truly global footprint. With over 300,000 SMB customers spread out over 110 countries, the company has deep market penetration both domestically and internationally.
Clients use Veem in differing ways. Typical scenarios include paying suppliers and labor, moving funds between banks, and taking care of payments on invoices.
By taking a next-generation approach that’s based on the blockchain, Veem enables frictionless and inexpensive payments (including cross-currency payments) on terms far better than legacy processes.
Billions in GMV per Year
Across its large customer base, Veem sees billions in gross merchandise value (GMV) per year. Crucially, the company’s systems are scalable, with accounts roughly doubling year over year throughout the company’s history. There’s no practical scale limit or cap to GMV going forward.
65% of New Accounts Come from Current Veem Users
Explaining how the company has achieved such rapid growth, CEO Marwan Forzley explains the three buckets into which new accounts fall:
- Veem’s own marketing programs
- Partnerships with Quickbooks, Xero, Netsuite and large banks
- New accounts originating with current Veem users
Of these, the third is most significant: roughly 65% of new Veem accounts come through current users. Because the business works using two-sided transactions, referral growth is natural, organic, and scalable.
Forzley states that members who like the service and find it delightful then implement it in ways that draw in new users. Current users might begin paying labor through Veem, leading to new accounts among the labor pool. Or a supplier could request payment through Veem, leading the supplier’s clients to adopt the platform.
Typical Startup Transmits Around $10k per Month Through the Platform
While account sizes and use cases vary widely throughout the customer pool, some patterns or trends emerge. A typical startup who begins using Veem might put somewhere around $10k per month through the platform. This could take the form of payments to labor or suppliers, customer invoicing, or any other mix of Veem features.
Forzley adds that as startups continue to be delighted by the Veem experience, they typically expand their relationship with the platform, which is there to scale with them as the startup grows.
Three Veem Products Driving Revenue Growth
Veem doesn’t charge transaction fees on ACH, check, or debit transactions. The company also doesn’t charge subscription fees or setup fees, meaning that the basic feature set is free for clients to use.
Veem generates its revenue through its advanced features. We’ll highlight three of these features, which could drive over $5b in processed funds in 2021.
Over 60% of Revenue from Foreign Exchange
Foreign exchange has been the primary revenue driver since the company’s inception because Veem started out with a focus on cross-border payments. In 2021, foreign exchange revenue sits north of 60 percent for the company.
Foreign exchange is a persistent pain point for SMBs that operate in multiple markets. Veem’s solutions greatly reduce the pain and friction in the process. While Veem has already achieved significant market penetration, Forzley anticipates continued growth across all revenue streams, including foreign exchange fees.
Veem’s take rate for foreign exchange ranges between 0.25% and 2%. Factors that affect take rate include the currency types involved, payment methods, and the countries of both parties.
These rates generate significant revenue for Veem, yet they remain highly competitive. Veem’s rates land at roughly half of what customers would typically pay when using a bank product.
2.9% Fees for Credit Card Use (and 1% on Instant Payments to Debit Card)
In looking to drive revenue for domestic users as well, Veem has added the ability to pay via credit card through Veem. The company collects 2.9% in fees on these transactions.
Veem has also added the ability to get paid in real time via debit card, with instant transfers into a linked checking account. For these instant transfers, Veem charges a 1% fee.
These rates are again competitive within or on par with the industry. Customers pay around what they would already pay elsewhere for the same functions but get the benefits of the entire Veem platform in exchange.
These card-based fees are one growth market for the company. Forzley estimates that within three years the three income streams will be roughly equal, each driving approximately one third of the company’s revenue.
Capital Programs Generating 12 to 24 Percent Interest
Veem’s newest and most exciting revenue stream in terms of growth potential is its capital programs. These are essentially short-term loans originated through Veem. Existing Veem users can request to pay a bill or invoice later (up to six months), with an effective interest rate that generally falls from 12 to 24 percent over a six-month arrangement.
Veem offers these short-term capital programs in partnership with existing banking relationships, not from its own balance sheets.
Small businesses need access to short-term capital. With Veem, they can get that access in the context of a platform they’re already using to pay suppliers or labor.
As the newest revenue stream program for Veem, the company’s capital programs are the smallest slice of revenue. But the growth trajectory is high: Forzley anticipates this stream reaching roughly 33% of income within two or three years as well.
Veem Reached $1m Run Rate in 2017
Veem reached a $1m run rate in 2017 and has continued to scale since that point. While the company would not disclose run rates beyond that year, Forzley did point out that the company has roughly doubled its number of accounts each year since. If new accounts translate roughly to growth in run rate, then Veem has a very healthy estimated run rate at present.
$31m in Series C Funding Completed in June 2020
In a highly regulated financial space, Veem needed to scale up in terms of both hardware infrastructure and licensing infrastructure. To date, the company has raised $100m in total to fund this build-out.
Veem’s most recent round of funding totaled $31m in series C funding, which occurred in June 2020. Since that point, the company has continued to innovate and network, recently completing a partnership with Prepay. In this partnership, Veem provides Prepay the ability to issue cards, and Prepay injects some further capital investment into Veem.
160 Team Members, with an Engineering Focus
Veem’s business is highly scalable and thus relies on a more low-touch approach to customer success. With a team size of just 160, Veem supports its 300,000 SMB clients. The company has also demonstrated the capacity to scale quickly higher.
As a tech-focus online global payments platform, it’s no surprise that Veem’s team has a heavy engineering focus as well, with dozens of engineers among the staff.
The Future of Veem Serving 300k SMBs
So what does the future hold for Veem, a company serving 300k SMBs and counting? Continued growth and revenue expansion are top priorities, and market conditions are favorable.
Veem CEO Marwan Forzley believes the B2B market is hot and will stay hot for a long time, especially in the realm of fintech and payments. After not seeing much change for decades, the B2B fintech market was and is ready for newer, more modern approaches.
With consistent year-over-year growth, Veem is poised to take advantage of this market readiness, so long as it can continue its pattern of growth and its track record of delighting SMB customers.
Only time will tell whether Veem’s three primary revenue products help the company reach a milestone of customers processing over $5b in 2021. But one thing is certain: the growth potential is there, and Veem is well-positioned to continue finding that growth.
