Five months after announcing its series A financing, Atomic has raised $40 million in a Series B funding.
Atomic's latest round was co-led by Mercato Partners and Greylock and the company said that it was not technically seeking to raise but was approached by investors. It has raised over 80 million dollars in total equity.
70 banks, credit unions and fintech companies are powered by the Salt Lake City, Utah-based company's product, which focuses on payroll data. 75% of the country is served by Atomic.
The startup provides the infrastructure to connect consumers to their financial data for verification of income and employment, automate setup and updating of direct deposits, repay financial obligations from their paycheck, maximize tax withholdings and access earned but unpaid wages. The company says it has technology that allows people to access their payroll data with a password.
The revenue of the company grew twentyfold from the fourth quarter of 2020 to the first quarter of 2021, but it did not reveal hard revenue figures. The month of December saw a 342% increase in revenue compared to December 2020.
Lindsay Davis, Atomic's head of markets, said in an interview that the company operates under the premise that digitizing payroll connects it to an inefficient process like applying for a mortgage.
Davis believes Atomic was one of the first to provide direct deposit acquisition for large neobanks.
She explained that the primary focus was to deliver a best in category experience with higher conversion rates when compared to other solutions.
A company in the rent space asked about the possibility of people being able to repay obligations out of their paycheck.
Davis said that they could tell them that was possible instead of the founder.
Atomic must be doing something right. Davis said it has 100% customer retention.
She believes the company's success thus far lies in its white-glove service.
We spend a lot of time as a team thinking through what the customer journey is, and then sharpening our own ability to ship a product that is in line with what a user would expect.
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Atomic is building out a platform to address things like being able toauthenticate into a system, which is something direct deposit is not.
Davis said that with permission to have access to a linked account, you're going to have persistent access to the data. For example, in a scenario where a consumer is getting a mortgage, that consumer has historically had to log back in frequently to get access to an employment indicator.
She said that with Atomic, you don't have to keep bothering the consumer since they have already approved it.
Davis says that the company doesn't like who it works with.
We want our product to be used in a positive way. She said that they wouldn't work with someone who was trying to charge an offensive interest rate.
According to Davis, the company told my colleague that Atomic does not compete with Plaid, the best-known provider of financial APIs.
Alex wrote that Plaid's products are used for linking consumer banking accounts to financial services and products. Atomic focuses on income streams, allowing them to be partially or completely diverted to new financial buckets, or simply made observable to other parties with user permission for verification purposes.
The company plans to use its new capital to hire more people.
Atomic's investors are bullish on the company's future.
Atomic's vision is to build more on-ramps to financial services and become the dominant infrastructure layer that connects companies and banks to consumers.
Atomic has created the future of financial services by homing in on the data in people's paychecks, according to Greylock partner Josh McFarland.
The Series B financing was participated in by Core Innovation Capital.
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Atomic aims to give consumers more control over their income with payroll-connecting APIs
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