Modulr has secured £18.9m funding.

The London-headquartered firm offers a digital alternative to commercial and wholesale transaction banking.

The funding round was led by European Growth Capital firm Highland Europe with participation from existing investors including scale-up specialists Frog Capital and venture builders Blenheim Chalcot.

It will see Modulr, which opened a base in Dublin last year, expand into European markets as well as develop its payments platform and invest in new products.

CEO Myles Stephenson said: “In the past year, we’ve experienced strong growth, we’ve gained direct access to key payments infrastructure and have positioned ourselves as a trusted payments partner for some of the most ambitious companies in the UK and beyond.

“With Highland Europe, we have a partner which can help to further fuel this momentum, investing in our infrastructure and product suite to ensure we can provide our customers with a reliable service that’s easy to access and simple to use.

“This is important, particularly in the face of this tougher business landscape. With this new investment we’re ensuring customers’ payments infrastructure can continue to work seamlessly in the background, so they have one less thing to worry about.”

The new growth investment takes Modulr’s total funding received to £53.3m and delivers on the FinTech’s commitment to match the £10m it was awarded from the Capability and Innovation Fund in August 2019.

In 2019, Modulr became one of the very few non-banks to gain direct access to Faster Payments and Bacs, as well as becoming a principal issuing member of Visa in 2020.

In less than four years, Modulr has scaled to process more than £25 billion worth of payments through its partner clients including Sage, Liberis, Salary Finance and Iwoca.

Modulr, which has been built over the last four years in partnership with Blenheim Chalcot, has established itself as the leading digital payments alternative in the wholesale and transaction payments market, which moves $120 trillion each year.

It specifically aims to disrupt the $2.7tn incurred through administrative costs – 80% of which is paid by small businesses, which rely on incumbent banking infrastructure.

Modulr’s digital payments infrastructure automates business payment flows, embeds payments into platforms and enables businesses to build new payment products and services themselves.

It says this allows businesses to scale quickly and efficiently, supported by its payments platform.

Laurence Garrett at Highland Europe says: “No-one can deny the opportunity of the business payments market, some five times the size of the opportunity presented by consumer payments, and Modulr is the leading platform in this space.

“We were impressed with its strong operational resilience and its proven history of sustained stable growth within the growing B2B payments industry. Myles and the team have firmly established the FinTech as the go-to provider of payments services for ambitious businesses, and we look forward to fuelling this growth further.”

Mike Reid, Senior Partner at Frog Capital says: “Modulr is a breath of fresh air in the enormous Corporate Payments industry, bringing clients a major step change in efficiency, flexibility and transparency delivered through their market leading technology.

“This, together with their direct Bank of England access, marks them out as one of stand-out European FinTech infrastructure players.”