Leaf Adds $20M as Payments Sector Heats Up
Deals are starting to fly in the battle over small-business payment processing.
Cambridge, MA-based Leaf, a startup that sells point-of-sale systems built around Android-based tablets, says it has raised a $20 million investment round. The investor is Heartland Payment Systems, a national merchant payments provider.
The investment is significant for Leaf, which had previously raised a few million dollars in angel investment and told us at the end of July that it was processing payments at a $55 million annual pace.
The deal comes just days after EBay, parent company of PayPal, acquired competing digital payments provider Braintree for $800 million.
Leaf CEO Aron Schwarzkopf tells AllThingsD that the money will help the small company hire more talent and ramp up development of its products.
Heartland CEO Bob Carr also told AllThingsD that his company chose to make the investment after looking at “many, many competitors of Leaf” before deciding the Boston-area startup was the right choice for an investment.
Princeton, NJ-based Heartland is no stranger to the Boston startup scene—the company previously agreed to sell Boston startup LevelUp’s mobile payments apps to merchants around the country. (LevelUp, incidentally, recently raised more cash itself from undisclosed investors.)
While Leaf sells its card-swipe tablets and accompanying software to small businesses, it has taken what it calls an “open approach” to processing the actual payments, allowing individual retailers to use third-party payment processors.
Heartland, which says it processes more than 11 million transactions per day and more than $80 billion a year in payments, has been one of those Leaf partners.
Leaf’s approach makes it something of a competitor to Square, the much-heralded point-of-sale startup from Twitter co-founder Jack Dorsey—both companies offer cash-register software and a chunk of hardware for swiping cards. But the open approach also differs from Square, which wants a piece of the payments-processing fees as well.
Payments has been a very crowded, bustling sector for startups and big companies alike in the past few years. With this deal, it looks like Leaf has a chance at making it at least one more round.