(Note: our press release addressed the announcement from a higher level. I wanted to add some personal color.)
Just a few years ago, I was walking up and down the street selling credit card processing services to businesses, trying to make ends meet. Today, after four years of bootstrapping our way to being one of the fastest growing companies in the U.S and becoming the gold standard of online payments, Braintree is accepting $34 million dollars in funding from Accel Partners, one of the most prestigious venture capital investors in the world. Our journey from then to now has been one of the most rewarding of my life.
I'm immensely proud and grateful for what Braintree has achieved. What's most satisfying to me is that our accomplishments have been earned without the help of any outside capital, industry gurus, celebrity founders, and scarcely any press coverage.
Being raised right
For the past four years, I think we would have described Braintree as more akin to a lifestyle business than a growth business. We didn't chase revenue for revenue's sake and we fired customers that were unpleasant to work with. We let profits sit in the bank instead of spending every penny we made. We were frugal. We focused on building useful products, hiring exceptional people, and caring about our work (I'm not suggesting that growth companies don't do these things. I'm simply sharing our thought process and approach). Word spread on its own and our success increased with it. In many ways, much of our good fortune has been unanticipated.
Looking back, I think we formed a lot of good habits during these years. I also think that we matured a lot as a company and refined our preferences about how we wanted to build Braintree. I'd like to think that we were raised right and that we're now well positioned to take on the challenges that we'll encounter in our next chapter.
Bootstrapped to raising money
Up until about six months ago, taking outside capital was not something we were interested in considering. We did what we wanted, how we wanted, whenever we wanted, and we were having a great time and experiencing a lot of success. However, with our growth, we were increasingly bumping up against constraints that limited our ability to provide both the services and quality our customers desired (and that we were committed to providing). We also started to piece the puzzle together as to what we thought would happen in our industry in the next 3-5 years. We began to wonder if our bootstrapping origins had served their purposes and if we should now consider raising money.
There were two things in particular that rose to the surface. First, providing a merchant account is core to our business, and it's something that creates a lot of risk for the company. As we've grown, the size of merchants we work with has increased (and so have their risk profiles). We wanted to continue to provide these services with the quality levels we desired. In order to do that, we needed a stronger balance sheet and someone with deep pockets.
Second, we believe that the payments industry is undergoing a transformative process as significant as what occurred with Netflix and Blockbuster. With this change, there will be compelling opportunities for us to serve our customers in better ways and create more value then ever before. We'll need more resources to do this.
Once we decided that raising money was the right move for us, we spoke to quite a few firms--no one impressed us as much as Accel. We found their style and approach to match up nicely with ours, and their portfolio companies couldn't say enough about how useful they've been in growing businesses. I couldn't be more excited to have them as a partner.
Over the years, we've managed to do a lot with few resources. Now, moving into our next chapter with Accel, I can't help but look back and feel satisfied with all that we've accomplished:
1. We're powering payments for many of the most dynamic businesses in the world. As one blogger recently put it, our customer list "reads like the front page of TechCrunch" and includes companies that are:
- transforming commerce: LivingSocial, Airbnb, Shopify
- providing innovative consumer utilities: Picnik, Animoto, OpenTable
- energizing the mobile space: GoMobo, Lookout, HotelTonight
- bringing tech infrastructure to businesses: 37Signals, GitHub, Brightcove
We are dedicated to our customers' success and couldn't be more proud of what they they've had to say about us.
2. Along the way, we've changed our industry for the better. We started the Credit Card Data Portability initiative to help merchants avoid hostage like situations with their stored credit card data. Everyone initially dismissed our efforts, but it's actually worked. For those of you unhappy about being held captive by your existing payments provider - go here for what you can do about it.
We've also set a new standard of honesty and transparency with our approach to pricing. The industry has long been plagued by unscrupulous practices that are detrimental to merchants and we've begun to see others forced to embrace more forthright business practices.
3. We've attracted 32 capable doers who build useful products, provide fantastic customer service and care deeply about the quality of our work. We don't have a single manager.
4. We've laid the foundations for an enduring culture with timeless principles that naturally govern human interaction and group cooperation. We have a lot to learn, but we like what we've started with.
Braintree hosted a Chicago tech company dodgeball tournament earlier this year. It was a blast!
5. We frequently receive enthusiastic praise from our customers who explain how satisfied and impressed they are with the way we assist them in growing their business.
6. Many Braintreeps have told me that Braintree is the best place they've ever worked and that they've never felt as satisfied. That's thrilling to hear.
Looking forward, our goals remain the same. We still believe that if you hire the right people you don't need managers of the traditional kind. We still believe that building useful products, providing excellent service, and caring deeply about what you do is the best recipe for success. We plan on doing all the same things that got us to where we are today.