With $4M in seed capital, Lynk launches payment platform for marketplaces
The startup's product is meant to reduce the burden of high processing fees, for both merchants and consumers.
Lynk, a platform to help marketplaces process payments with lower fees, has come out of stealth and raised CAD $4 million (USD $3 million) in seed capital. Investors include Samsung Next, Plug and Play, Tribe Capital, Simplex Trading, Toronto’s N49P, and others.
Why it matters: In an environment of high inflation and interest rates, costs are rising for everyone, as goods and services go up in price and banks and financial service providers pass on fees to merchants and consumers. Lynk’s product is meant to enable a diverse range of companies – like a food delivery app or insurance processing firm – to reduce their payment fees, and, ultimately, retain customers.
Who’s behind this? Lynk was founded by CEO Nabi Awada and vice president of operations Ali Sedighi. Prior to launching Lynk, Nabi was the global chief product officer at Rappi, where he helped to raise nearly $3.4 billion to build challenger banks and credit programs throughout Latin America. He also held product leadership roles at Monzo and Revolut. Sedighi is a 15-year tech, SaaS, and fintech veteran, having worked at companies such as Paypal, VMWare, and IT Glue.
Nabi Awada and Ali Sedighi
More details: “Credit card fees and building customer loyalty are two of the biggest challenges for small business owners,” according to Awada. “In the current payment systems, they are at the mercy of credit card providers, banks, payment networks, and aggregators that all pile on fees and control when payments are funded.” With Lynk, he wants businesses to own their payment experience “the same way Starbucks owns their payment ecosystem with their branded wallet, which costs millions of dollars to develop.”
According to the company, a dozen merchants are already using Lynk’s platform, which is designed for startups, and small- to medium-sized marketplace and gig economy companies. It’s projected to power more than two million retail transactions in 2022. For each one of those transactions, Lynk claims that its transaction fees are the lowest in the industry, ranging from 0.5 to one percent, versus traditional credit card processing fees, which range from between 2.9 to five percent per transaction.
It’s a key selling point, according to early customer Scott Armstrong, co-founder of GasAppAuto. “We chose Lynk because of their ability to provide us with the lowest fees in the market and to get us up and running fast,” Armstrong explained. “Lynk is going to fuel our growth at GasAppAuto rapidly.”
Money talks: Lizzy Goldman, an investor with Samsung Next, said she invested in the startup because it enables companies to focus more on developing innovative products and services, and less on overcoming financial and regulatory obstacles. “We think Lynk’s end-to-end platform is in a good position to grow by helping companies start and manage their businesses without high costs and time-consuming operational challenges,” she said.