New York-based Melio, a payments startup focused on small businesses, raises $144M to hire more staff and expand in the US
Melio, a payments startup focused on small businesses and backed by investors including American Express Ventures and Bessemer Venture Partners, has raised $144 million to fund new hires.
Context & Ripple Effects
This September 2020 round is the opening move in one of the faster B2B-payments arcs on record: Melio converts this $144M — raised with small-business digital banking rival NorthOne raising its own Series A months earlier amid a wave of SMB-focused fintech funding — into hiring and a US expansion push. Within months the company layered on a $110M Series C2 and then a $250M Series D led by Thrive Capital and General Catalyst at a $4B valuation, tripling its January mark.
The endpoint matters more than any single round: by June 2025, accounting-software vendor Xero agreed to acquire Melio for over $2.5 billion in cash and stock, making today's expansion capital effectively the first step toward an exit into the vertical-software stack that small businesses already run.
First-order effects
- Melio directly adds headcount and pushes deeper into the US market, with backers including American Express Ventures and Bessemer Venture Partners doubling down on the small-business payments wedge.
Second-order effects
- Adjacent SMB fintech plays — NorthOne's business-banking app among them — face a better-capitalized payments competitor bundling money movement next to their core accounts, while accounting platforms watch payments attach rates become the deal currency.
Third-order effects
- If the trajectory holds, standalone small-business payments startups increasingly get absorbed by the accounting and software vendors they integrate with — Xero's $2.5B-plus acquisition being the template — rather than remaining independent rails.
The trend: Venture-funded B2B payments startups are compressing multi-year funding ladders into rapid-fire rounds and exiting into vertical software platforms, with accounting vendors paying up to embed payments natively.