Palo Alto-based digital business payments company Bill.com raises $88M at a $1B+ valuation and announces a strategic partnership with Mastercard
Opinions expressed by Forbes Contributors are their own. — Share to facebook — Share to twitter — Share to linkedin Tweets: @billcom Tweets: @billcom : In the US, $58 trillion is paid between companies each year with 80% using paper checks. Investors, banks, & #creditcard companies like @Mastercard are helping us to change that. Great piece from @donnabail @Forbes: http://www.forbes.com/...
Context & Ripple Effects
Bill.com's Mastercard deal extends a pattern from its earlier $100M round led by JP Morgan Chase and Temasek: strategic financial institutions taking equity to secure a position in SMB payments software. The company frames the prize explicitly — a $58 trillion US business-to-business payment flow still running mostly on paper checks.
The bet paid out on the timeline this coverage traces: within eight months Bill.com filed showing Q3 revenue up 57% YoY, then priced its IPO above range at $22 per share for a ~$1.6B valuation.
First-order effects
- Mastercard converts from a rail operator into a shareholder-distributor: its network reach now has an embedded channel into small-business payables through Bill.com's platform.
- Bill.com gains card-network validation and distribution at a $1B+ valuation, strengthening its hand against bank-led rivals like JP Morgan Chase, which had backed it directly two years earlier.
Second-order effects
- Competing SMB payments and invoicing vendors now face a rival with both a major card network and major banks on its cap table, pressuring them toward their own strategic partnerships or consolidation exits — the route Bill.com itself later took with the Divvy acquisition and the Invoice2Go deal.
- Banks processing commercial paper checks see fee erosion accelerate as card networks fund the software layer displacing them.
Third-order effects
- If strategic capital keeps pairing networks with software platforms, B2B payments consolidate around integrated AP/AR suites rather than standalone processors — visible in Bill.com's subsequent acquisitions of Divvy and Invoice2go.
- The check-to-digital migration in the $58 trillion US business payments market becomes a land grab where ownership of the workflow, not the payment rail, captures the economics.
The trend: Card networks and banks are increasingly buying distribution into SMB finance through strategic stakes in payments-software platforms, accelerating the displacement of paper checks by integrated digital workflows.