The Rise of Fattmerchant
With $20 million in venture capital, $5 billion in payments processed, and nearly 100 employees occupying three floors of prime downtown Orlando real estate, flat-rate credit card processor Fattmerchant – just this month celebrating its fifth birthday – might appear as though it came out of nowhere.
But the award-winning, subscription-based merchant services company came out of somewhere, and that somewhere was Central Florida’s leading tech accelerator, StarterStudio.
Fattmerchant got off the ground when CEO Suneera Madhani met the company’s future CTO, Jacques Fu, and its first few investors in StarterStudio’s third accelerator class.
Madhani and co-founder, Sal Rehmetullah, have since grown the company from two customers in 2015 to 5,000 today, with verticals in health care, professional services, retail, and field services such as lawn care.
Fattmerchant raised an initial $850,000 seed investment led by venVelo and Richard Licursi’s early-stage venture capital fund.
“I first met Suneera Madhani at StarterStudio as I did other members of our portfolio,” Licursi said. “StarterStudio provides entrepreneurs with the basic framework necessary to build a viable company, and it also provides much of the impetus to help the founding teams prosper. In addition, they provide a strong platform to introduce early-stage companies to local investors. venVelo has invested in several of the StarterStudio graduates.”
Licursi said Madhani and Rehmetullah have done a great job of building a powerful company in a difficult industry and that it’s been exciting to watch the company grow.
“Fattmerchant is one of our most successful investments, and we are proud to be part of the Fatt Family,” he said.
Suneera Madhani, named by PaymentSource as the Most Influential Woman in Payments in 2018, said participating in StarterStudio was “one of the most pivotal decisions I made for Fattmerchant.”
She launched the company after her idea for the business model was turned down by her employer and a dozen other companies to whom she pitched it.
“When I launched, I was all alone,” Madhani said. “I didn’t have entrepreneurial friends and didn’t have a team.”
All that changed when she walked through the doors of StarterStudio.
“I was finally surrounded by peers who were also facing the same challenges I was. They were also trying to validate their ideas.”
One of those people was Fu, who was there to vet his own startup idea. Another was Fu’s co-founder, Daniel Walker, now Fattmerchant’s Head of Engineering.
“We combined our talent while going through StarterStudio,” Madhani said.
Fu called going through StarterStudio’s accelerator, “the most transformative experience of my life.”
“One of the most crucial aspects of the program was how it broke down each step of the scaling process into concrete action items that never seemed overwhelming,” Fu said. “From understanding term sheets, connecting with investors, learning how to conduct customer interviews, to how to commercialize and market our product, StarterStudio was there all the way to help us.”
The proof of StarterStudio’s value to Fattmerchant was readily apparent on Demo Day, when each member of the accelerator class pitched to an audience that included virtually every major investor in Central Florida.
“By Demo Day, we were able to launch our actual payment platform. We demoed to investors, and we were able to secure investment right after that. We secured $850,000 in our seed round. That was the start of it. StarterStudio was the beginning. It was really important for us.”
StarterStudio Executive Director Donna Mackenzie was Fattmerchant’s mentor for finance along with Martin Suter. Combined, they’ve raised $175 million in venture capital for startups.
“We would crank through business models and do financial forecasting.” Madhani said. “Donna and Martin were incredible mentors.”
Madhani now serves on the StarterStudio board.
“I’ve come full circle. I actually get to give back,” she said. “It’s important for me to see more startups succeed. I don’t want to be the only one, or one in a few. We could have so many success stories. My goal is to see more of that and to help drive Orlando as a technology hub.”
Meanwhile, Licursi, who was another of Fattmerchant’s mentors at StarterStudio, sits on Fattmerchant’s board. He continues to advise the company on its growth strategies, which include integrating its API into the software of other companies such as practice management systems, so when a dentist or optometrist gains a customer, so does Fattmerchant.
Not only does a customer with $100,000 or more in annual revenue save money with a Fattmerchant subscription, but it also gains a unified way to see the overall health of the business across multiple platforms, from on-the-go payment systems to QuickBooks Online, billing software and shopping carts.
“With Fattmerchant, we integrate with all the ways they take payments, and we provide them with our technology into a single stack, a single platform known as Omni, so the whole experience is unified,” Madhani said. “We have thousands of integration partners so that people don’t have to change their terminal or point of sale. We’re also providing really smart data: which customers are loyal or returning; what percentage are new; what’s the busiest time of day for your healthcare practice.”
Madhani would like to see more companies starting, scaling and staying in Orlando as Fattmerchant has done.
“We need dollars and investment in programs like StarterStudio to get them to the next level. We need to surround these companies with mentors, getting their ideas validated. This is the perfect training ground. We need to support the programs themselves but also seed fund startups.”