[This profile first appeared on page 112 in the 2014 Red Herring Special Issue: Vol. I Some spelling and grammar were corrected from the original as notated, nothing else.]
Though it powers online payment[s], e[-]PaaS ([…]Payment[s] as a Service) company Yap[S]tone doesn’t directly compete with e-commerce transaction platforms like PayPal, BrainTree or WePay. Instead, the company’s coming for what’s in customers’ pocketbooks: checks. Yap[S]tone serves verticals where payments made are normally check-intensive, like for apartment and dorm rentals, nonprofit donations, vacation rentals and storage facilities. Yap[S]tone pops up everywhere clients pay with pen and paper, urging them to make payment[s] easier on all parties via the company’s platform.
In 1999, Yap[S]tone CEO and co-founder Matt Golis founded RentPayment, Inc., funding the venture with his own money and that of two other angel investors. With money running out in late 2000, Golis saw an opportunity to team up with another company in their market headed up by cofounder Thomas Villante: Yap[S]tone.
Today, Yap[S]tone remains the corporate holding company, with RentPayment the product in the apartments market, he says. In the dotcom boom, property managers refused to throw their lot in with providers deploying services limited to web platforms. “Back [in 2001], 99 out of 100 companies shut their doors [to] the ones that were restricted to only online commerce, and it was only because we realized…we could grow the company by offering offline payment methods…that we really survived.”
Now, the majority of payments comes via the web or Yap[S]tone’s mobile app. Last year, the company’s revenues reached $68 million, with business “growing substantially this year and next,” Golis says.
Yap[S]tone differentiates with its focus on distinct verticals. Through partnerships and acquisitions, the company has grown from an apartment rental payment portal to a comprehensive API that powers payment processing across industries. In 2011, Yap[S]tone teamed up with HomeAway to facilitate debit, credit and e-check transactions paying customers for use of their vacation homes listed on HomeAway and VRBO. Last year, Yap[S]tone brought ParishPay, LLC into its fold in order to further facilitate customers’ electronic[…] donations to churches. Though niche, this division of the non-profit sector proves substantial, as ParishPay serves 1,000 parishes and according to Golis, is the largest payment processor in the Catholic Church. The service fits verticals’ individualistic needs, unlike a more generalist platform.
Apartment rent payments to property managers via credit or debit cards “involves a number of different very specific rules around the recurring nature of it, how to treat things like deposits, how you treat things like the expiration of a lease,” says Sameer Gandhi, partner at Accel Partners (which invested in Yap[S]tone). “All those specific rules are built into the platform…so that anybody in this vertical can literally sign up and use it.” Though Yap[S]tone eschewed venture money to start with, the aforementioned deals and acquisitions––plus the prospect of building an international office in Dublin––convinced Golis and Villante to bring in outside capital. “It was on the heels of the HomeAway partnership, where it was pretty obvious that we would have great visibility into what our revenue growth was going to be for the next several years,” he said. “We thought this would be an opportunity to get a great valuation, and at the time we had a couple of acquisitions that we had our eye on, as well as our expansion to Europe.”
In June 2011, the company announced a $50 million financing round led by Accel Partners and Meritech Capital Partners. Today, Golis says that the with the company’s current growth rate, a public offering presents not just a possibility––but could be attainable 12 months out. Though Yap[S]tone serves segmented markets, split up from property and nonprofit verticals, in total they face a $700 billion opportunity. In the future, Golis says they’d like to create a product that interacts even more directly with the consumer. “After 14 years, we have such phenomenal SEO results as far as renters just wanting to pay with a credit card online, that we want to make it even easier for them to do so,” he says.
Thanks to partnerships and market development, the company, headquartered in Walnut Creek, California, currently makes payment a piece of cake for its customers, though those clients call varied and disparate countries home. “We still have not seen a company that’s either in the payments industry or even a technology company that can handle a lot of the cross border types of issues that you see internationally,” Golis says. “In the case of a vacation rental, where you may have a traveler coming from Australia that needs to pay [a] homeowner in London, we can do things to make it easy and very painless for that homeowner to receive their disbursement in pounds regardless of what currency the traveler wants to pay them in.”
If Yap[S]tone has its way, checks meant for property payment[s] will be replaced, rather conveniently, by pieces of plastic.