Basis Theory raises $33M to let merchants route payments across Stripe, Adyen, and Checkout.com simultaneously

though like I'd never worked in an office, I still found it funny at like age 12 for some reason. It was very, very fun. Evergreen. Anyway, we have our next guest joining from the Reream waiting room. We have Colin What's happening? Welcome to the show. I'm not actually I'm not actually going after the ramp event, am I?

Yeah, you are. Fast follow to the stream. Please kick us off with an introduction on yourself, the company, any news. Awesome. Yeah. Hey guys, uh thanks for having me. So, Colin Loose, co-founder and CEO here at Basis Theory.

I think the uh the simplest way to think about what we do is we help merchants, platforms, fintexs um not have to face the decision of working with Stripe or Aden or Checkout, but rather be able to seamlessly work with Stripe and Aden and Checkout. Um there's a myriad of different reasons why that's important.

I think first and foremost, these platforms today are just global by default, right? Um, like I was thinking about it the other day, the fact that like I think the latest numbers say 10% of the world's population uses chat GPT.

Like less than 3 years in, Facebook was still moving from like Ivy Leagues to like state schools in the US, right? Um, and then I think the other side of it is payments has kind of moved from being a cost center to uh a growth driver.

And I think that's forcing companies to think about it less from a cost perspective and more from a performance perspective. Um, and look, each of these individual PSPs has their own, you know, secret sauce and areas where they specialize.

And so it's just increasingly important that you can work with multiple of them as opposed to one. Okay. Explain Sheil's take. Explain Sheil's hot take and then debunk it. I had a note I had debunk it. I had a note to call out Sheil and I love Sheil. Uh I I went to Sheil's first fish concert with him.

So like Sheil and I are homies. But yeah, like he took this like victory lap last week, you know, saying like Stripe's win, Stripe won Agentic Commerce, it's over. And like that just couldn't be further from the truth, right?

Even if you look at Stripe's core business, I think people sometimes forget like Stripe and Adion together are still less than 10% market share in the US, right? That means 90% of the US acquiring volume is still sitting out on these legacy platforms.

And so, as much as we talk about Stripe, like I'd argue Stripe hasn't even won US acquiring yet. There's a lot of volume to port over. And we're seeing the same thing play out on the Agentic side. Um, Stripe can do a magical demo uh for merchants within the Stripe ecosystem.

Uh, I think the second you eject out of that, there's a lot of complexity. Sorry, I'm just adding dramatic sound effects to Where's the shots fired from these? Uh, yeah. No, these are a bunch of great lines. I wanted you to explain basis theory like I'm a a venture capital associate, right?

to like explain it like in really in really simple terms cuz I'm trying to understand where it like you're you're the killer GP is completely checked out. Yeah. Like two years from retirement but I'm trying to understand customer comes in they want to buy something.

Are you guys sitting before and then we Yeah, that's right. So we sit at the very front we provide some real time data to the merchants about the payment credential the actual credit card. Hey, this is a Visa signature card issued by a US bank or this is a master card issued by a European bank.

Based on that realtime insight, where do you want to route this transaction? Do you want to route it off to Adyen? Do you want to route it off to Stripe? And oh, by the way, if you get an immediate decline from one of those, why don't you turn around and reroute it elsewhere and see if you can get that customer through?

Right? I think that's the other side of it, right? like these these modern merchants who are selling these like ridiculously high gross margin digital products like they just want to get more stuff out the door, right?

They're they're actually okay taking on more fraud and risk if they can just sell more 90% gross margin goods, right? So it's from the merchant side, merchants want to have multiple payment providers so that they have some leverage in these conversations. Is that right?

Yeah, I mean that was uh I was going to answer your question about explain it to the GP, but then I thought about the GP doesn't have this problem, but but maybe like you know the GP's nephew, right? I always talk about in the terms of uh Comcast here um you know in California, right?

Like every time you call Comcast and you say, "Hey, I'm switching to YouTube TV," they magically have a 50% discount uh that they can get you on, right? Same thing applies here. Um the problem is your data is locked away with these processors today.

So the minute you take back that control and start storing it yourself, you have immediate leverage to make that call. Interesting. Give us the fundraising news. Yeah. So we just announced we raised $33 million. Um it was a pretty cool There we go. Congratulations.

Uh it was it was a cool event because our lead investor, Costaoa, we actually met at the seed um and ended up going in a different direction. Our A came together quickly with Bessemer. This was 2021.

Um, and then when I reached out to Amy at Costa Noah and told her we were going to kick off a B earlier this year, she I was like, who should I talk? So, is this is this round mean that you guys are official officially back?

Because a lot of fintech companies, you know, went into the valley of despair and they're still down there. Fin. Um, you know, look, I wish I was an ERP a native AI ERP company, though. Maybe I'll get another round tomorrow. Yeah, the chat the chat says the chat says this guy looks like he surfs. This guy surfs.

Uh do do you surf? Such a disappointment. I don't I'm It's okay. It's okay. There's the surfing is wildly distracting from creating enterprise value. I always struggled. I I I grew up uh you're in Mil Valley. Yeah. I grew up uh just just uh north of you and I always struggled surfing in the morning.

you get so cold and then your body is spending all day long trying to heat up and it's taking energy away from uh spreadsheets which uh that's pretty counter to Silicon Valley Wisdom and ice baths and stuff though.

Yeah, but but getting like cold for a few minutes and then heating heating up uh is you know different than you know 90 minutes in like 45 degree water whatever uh gets down to in the winter. Um, but uh uh what was I going to say?

Uh are are you guys actually building the company in Mil Valley or you do you have an office in in SF? Yeah, look, we're we're a co baby, so we're fully remote. Um but it was definitely pretty funny when we announced our series A.

The news headlines were like Mil Valley based payment infrastructure company raises $17 million. Sounds like it sounds pretty cool. Sounds pretty cool. Yeah. No, I'm I'm here uh a block away from our friend Nate uh and Offline Ventures.

Um and then we uh we squat in our investors offices for free in San Francisco once a week. Nice. Smart. Smart. Awesome, man. Well, congratulations on the milestone. Uh yeah, excited to uh follow the journey. We'll talk to you soon. Have a good rest of your day. Cheers.

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