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Modern Treasury, a financial technology firm focused on connecting business payments infrastructure to the Internet, today announced $38 million in new funding on Tuesday.

The round was led by Altimeter Capital. No new valuation for the startup was disclosed.

Benchmark Capital and Y Combinator, which had backed prior rounds of funding for Modern Treasury, also participated in the Series B, or second round of major financing. Modern Treasury was part of Y Combinator’s startup incubator in summer 2018.

Modern Treasury is to some degree following in the footsteps of payments startup Stripe (Y Combinator class of 2009), whose core offerings are tools that let online retailers easily connect storefronts to credit card processors.

Instead of credit cards, though, Modern Treasury builds software to help integrate direct bank services, including ACH, check, and wire transfers, to online services.

“Innovation on the Internet is starting to reach these older-school parts of the economy,” says Modern Treasury CEO and cofounder Dimitri Dadiomov. Those include business-to-business payments, payroll and benefits, student loan processing, rent collection, home-sales escrow, and health care payments.

Those payments markets may present an even bigger opportunity than credit cards. An estimated $18.5 trillion worth of business-to-business payments are made each year in the United States, with 88% of those conducted via wires, checks, and ACH payments. U.S. credit card payments, by contrast, total about $4 trillion per year.

Legacy business-payments methods, particularly checks, can sometimes mean a long wait before money actually shows up in a company’s coffers. Modern Treasury says it can help businesses eliminate that costly wait.

But that streamlining is a painstaking job, as Dadiomov learned in a prior role overseeing bank integrations for online mortgage service LendinHome.

“An ACH is an ACH and a wire is a wire, but the way they code that, you have to build something different for each one,” says the CEO. After realizing that the same work was being duplicated at many other companies, Dadiomov decided to found Modern Treasury to handle it all in one place.

Modern Treasury describes its current trajectory as “explosive growth.” The company passed $1 billion in total settled payments in 2020, and according to Dadiomov passed $100 million in monthly payments processed in August of 2020. The coronavirus pandemic has accelerated digital transformation across the entire economy, including sectors like real estate.

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