November 14, 2016 – A Birmingham company is poised to capitalize on nearly two decades of steady growth and innovation in financial technology, thanks to a $5 million venture capital investment from Florida-based Ballast Point Ventures.
Prepaid Technologies in October announced the investment, just months after it teamed up with Visa to provide wearable tech payment rings at the summer Olympics.
Though Prepaid believes wearable tech is an industry worth exploring – the company is working on another project with MasterCard and U.S. Youth Soccer – the company’s bread-and-butter remains in electronic payments options like payroll cards, prefunded purchasing cards and incentive programs. The company was founded in 1998 by Thomas McCulley.
“The old-fashioned check processing methods cost businesses a lot of money and a lot of time,” Prepaid President Stephen Faust said. “We’re seeing a huge expansion in corporate purchasing card. These products can be implemented for businesses for very little costs, very quickly. They make a difference to businesses’ bottom line.”
BPV’s investment will allow Prepaid to strengthen their IT capacity, Faust said, streamlining and automating internal process flows to allow staff to work more on client satisfaction and developing product. Prepaid will also add staff and develop their marketing arm.
Faust said the company has benefited from hiring account managers with higher education levels, in addition to banking and finance experience.
“Being able to recruit locally and find talented people to help us move the needle is really exciting,” Faust said.
Faust joined the company in 2008 and began building out their suite of services and technology. The company was expanding around 20 percent annually, Faust said, when McCulley handed over the reins to Faust, who happens to be his son-in-law. Though McCulley remains involved on a daily basis, Faust said he saw potential to grow the business to the next level.
“70 percent of the businesses in the U.S. are still processing payroll checks,” Faust said. “So the opportunity of finding efficiencies there and moving those folks to electronic pay at no cost is a huge opportunity for us.”
Prepaid began to attract venture capital attention, but Faust said he and McCulley felt that nothing seemed like the right fit until they were contacted by Ballast Point. BPV brought “smart capital” to the table, Faust said, because they’d previously invested in a similar company and knew how to take the business to the next level.
“Tommy and I knew it was a no-brainer,” Faust said. “They’re great partners, and we still have control over company to direct it how we see fit. But having that horsepower behind us, with the smart money, made the timing made sense.”
Their Prepaid investment isn’t BPV first venture into Birmingham: the firm recently invested another $5 million into ticketing software company TicketBiscuit.
“We were very impressed with what Tommy and Stephen have achieved to date with no outside capital, and we look forward to working with the entire Prepaid Technologies team as they continue to grow and develop innovative payment solutions for the payroll, loyalty and rewards needs of their clients and partners,” Paul Johan, Ballast Point Ventures partner, said in a release. “Payments and financial technology are areas that are very interesting to BPV given our previous investments in the sector, so we are excited to partner with the talented team at Prepaid Technologies to build a leading payments technology platform in Birmingham. This is a great fit for us given our focus on partnering with rapidly growing private companies with great management teams headquartered in the Southeastern United States and Texas.”
Source: Birmingham Business Journal