More than 30 million euros for Andreesen Horowitz's only German portfolio company

Three former Delivery Hero managers want to solve problems large companies face with online payment processing with Payrails. How the fintech has weathered the crisis so well.

It's one of the largest fintech financing rounds in Germany this year: Berlin-based startup Payrails has closed its Series A round with $32 million. The lead investor is German venture capital firm HV Capital, Sweden's EQT Ventures , US investor General Catalyst , and VC Andreessen Horowitz (a16z).

The latter has invested in Payrails since 2022. At the time, it was the first investment by the Californian VC of Marc Andreessen and Ben Horowitz in a German fintech – ever. In general, Germany as a startup location was and still is barely on the radar of Americans. Previously, a16z had only invested once in a German-founded company, Rasa. However, the AI ​​chatbot startup already had a foothold in the US, where its headquarters are today. So, what the three-person Payrails founding team had in mind seemed quite special to investors back then.

Orkhan Abdullayev, Emre Talay, and Nicolas Thouzeau knew each other from their time together at Delivery Hero, where managers in the company's finance department were looking for a solution to a problem familiar to e-commerce providers: If one of several payment service providers fails, how can customers be seamlessly redirected to another? Their idea for a software solution to address this issue led to the decision to found their own startup. They left their former employer on good terms, and the then CFO of Delivery Hero, Emmanuel Thomassin, became one of the startup's first investors.

The current Payrails round is likely one of the few fintech investments in recent times, not only for Andreessen Horowitz, but also for the other investors. The segment has struggled with challenging conditions over the past year and a half. Global investment volume in fintechs fell to its lowest level in seven years in 2024 , primarily due to high interest rates, inflation, and geopolitical uncertainty.

Was it difficult to raise in this climate? No different than before, says Orkhan Abdullayev. "This was our third round with strong investor interest. And the market environment was already challenging during the previous one, because at that time, in 2022, there were almost no financing rounds in Europe." Nevertheless, since its founding in 2021, investors have invested around $52 million in Payrails.

Nonetheless, the founders kept their runway well under control, says Abdullayev. They were always "very disciplined" in managing the capital available to them. And they always focused on rapid growth AND revenue. Because that was key, especially during these tight times: "If a company is doing well and you can demonstrate strong profitability, you'll find investors."

The "strong cost-effectiveness" is reflected, among other things, in the big-name customers who, according to the company, now use Payrails. These include brands such as Puma, Vinted, Flix , and In-Drive. They manage their payment processes with the Berlin startup's software, centrally control various payment service providers such as Stripe and Adyen, and can process incoming payments, forward them to the appropriate providers, analyze transaction data, and reconcile payments via the platform.

According to Payrails, it processes more than one million transactions daily in 30 countries. The focus so far is on EMEA – Payrails maintains offices in Berlin, Paris, London, Cairo, and Dubai – but may also expand to the US in the future, Abdullayev hinted in an interview with Gründerszene. "Even though Berlin is our home turf."