Payments Startup SpotOn Gets Funding from Mubadala, Others

The firm is the latest in a series of growth sector bets the sovereign wealth fund has been making.

A fintech payments company called SpotOn has gained $125 million in Series D funding from new investor Mubadala Investment Company and returning investors led by Andreessen Horowitz. 

The funding round certifies the startup’s unicorn status after elevating SpotOn’s valuation to nearly $1.9 billion, the fund announced Wednesday. The firm services small and midsize businesses in the restaurant and retail sectors through its online business tools platform. 

Thus far this year, the startup has added nearly 8,000 businesses to its platform. The ability to streamline digital marketing, review management, and data analytics, and complete and accept payments winds up saving firms “thousands of dollars in payments and software fees to multiple vendors,” SpotOn says.

For Mubadala, this is just the latest in a string of investments the sovereign wealth fund has recently made to firms in growth sectors. Last year, the Abu Dhabi-based allocator placed $29 billion into technology, life sciences, and other sectors, up from $18.5 billion in investments the prior calendar year. 

“Technology and life sciences in particular have been essential to the world over the last year, and we see those sectors bringing greater opportunity for deeper investment,” Mubadala Managing Director and Group CEO Khaldoon Al Mubarak recently said. 

Other bets include investments into a real estate tech firm that transforms parking lots into urban hubs for restaurants. For some time, the investor has been diversifying its portfolio to wean Abu Dhabi’s economy off its dependence on energy.  

Last year, Mubadala’s investment allocation helped it retain a record $243.4 billion (AED 894 billion) in assets under management (AUM), a 4.8% jump from the prior year, when it had US$232 billion (AED 853 billion). 

Funding for the financial technology sector has only boomed during the pandemic. In the first quarter of this year, investors drove $22.8 billion into the largest funding quarter on record, according to CB Insights, into investments such as digital assets, banking, and cross-border payments. 

Every populated continent in the world except for Africa experienced growth in fintech deal activity. Other payments firms that have recently attracted capital from sovereign wealth funds include Razorpay, a firm in India that raised $100 million in a funding round led by Singapore sovereign wealth fund GIC. 

Other investors that also participated in the SpotOn funding round include DST Global, 01 Advisors, Dragoneer Investment Group, and Franklin Templeton. 

Related Stories: 

GIC Leads $100 Million Funding into India’s Fintech Razorpay

Mubadala Wants to Turn Parking Lots into Hubs for Restaurants

Mubadala Goes on a Spending Spree in 2020

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