We are pleased to announce that Foundry Venture Capital 2016, L.P. has completed its initial investment in Dwolla as part of a $6.85 million financing. Based in Des Moines, Iowa, Dwolla provides an API platform for white label ACH bank transfers, enabling a robust connection to the banking infrastructure for software applications.
In 2012, Dwolla raised a financing led by Union Square Ventures to change how payments worked. They initially focused on a consumer to consumer service, scaled the team up significantly, raised several rounds of capital, and built a lot of software to support the infrastructure that was required for their consumer service.
The consumer service didn’t work out for a variety of reasons. But the underlying software was very impressive. Recast as an API-based business, Dwolla is similar to SendGrid and Twilio, two companies we know well, and fits front and center in our Glue theme. As part of this reset of the business, Dwolla shifted its focus back to Des Moines from San Francisco, where it had moved its leadership team several years earlier.
We were reconnected to Ben Milne, the CEO, by several friends. USV had led a new round a few months ago and they were looking for additional investors to fill it in. After talking to our friends at USV, we decided to engage as well as make a few introductions for Ben to funds who are investing in companies in the mid-West.
We were collectively impressed with the current status of the company, the strength of the API platform, the existing customer base, and the growth curve the company was on. After six years, we believed Dwolla found its fit in the market and was now focused on getting cash flow positive on a modest financing. Ben, as founder and CEO, was completely committed to building Dwolla 2.0 in the mid-West.
Along with USV, High Alpha, Ludlow Ventures, Detroit Venture Partners and NextLevel Ventures, we’ve put together a strong financing for Dwolla. We look forward to working with Ben and team to grow an important business, serving developers around the world.