Compliance-centric messaging and payment solutions platform Solutions by Text (SBT) has secured $110 million in new growth financing. This funding round was co-led by growth equity investment firm Edison Partners and global private markets investment firm StepStone Group, with Stifel Venture Bank, a division of Stifel Bank, providing a lending facility.
"We are so pleased that Edison Partners and StepStone share our conviction about the vast potential for an enterprise-scale compliance platform to orchestrate text messaging and payments in consumer finance. Consumers want an alternative to endless emails, confusing web portals, and lengthy rounds with call centers when engaging their financial providers. While texting is ubiquitous with consumers, it has not matched up with the rigorous business requirements of finance regulators and carrier networks. We have bridged this divide to drive massive returns for our financial customers and put us on an accelerated upward growth trajectory," said David Baxter, CEO of Solutions By Text.
Since Edison Partners' initial investment in November 2021, SBT's bookings and revenue have surged more than threefold, driven by its compliant messaging and payment solutions tailored for consumer finance businesses in areas such as origination, servicing, marketing, and accounts receivable. In 2023, SBT saw a 95% increase in messaging volume compared to the previous year, and it is on track to more than double its messaging volume growth this year.
Almost all consumers prefer texting
Text messaging is one of the most effective communication methods, with 90% of consumers preferring it over other forms. Most text messages are read within five minutes of being received. Despite this, regulatory complexity and carrier policies have deterred 60% of SBT's new customers from using text messaging due to compliance concerns over the past year. The challenge of maintaining compliance has also led some customer engagement and messaging providers to exit the financial services market. SBT currently stands as the only end-to-end enterprise compliance platform for messaging and payment solutions serving the consumer finance industry.
SBT's compliance-first platform is opening new opportunities for its customers, particularly in the payments sector, where messaging dynamics are highly favorable. In the U.S., nearly 17 billion bills are issued annually, growing at a rate of 7% and amounting to nearly $6 trillion in spending, with 40% of these bills related to consumer finances.
Although 88% of Gen Z and Millennial consumers express a willingness to make payments via text, only 9% have had the opportunity (according to Datos report). With this new investment, SBT plans to continue its growth with large financial institutions, enhance its payments and artificial intelligence capabilities, and explore inorganic growth opportunities.
