Stripe, the $95 billion fintech company based in San Francisco, has made another purchase to broaden the services it offers in addition to its core payments platform. The company is acquiring Recko, a company that has developed a platform that allows organizations to track and automate payment reconciliation, including both outgoing and incoming payments, as well as the entire ecosystem of inbound and outbound payment sources and recipients. Recko, like Stripe, relies largely on APIs to interface and operate with many data sources. Recko is headquartered in Bangalore, India, and when the deal is finalized, it will be Stripe’s first purchase in the country (based on customary closing conditions).
Stripe said the deal’s terms were not revealed. However, for some context, Recko had previously secured $7 million from Vertex Ventures, Prime Venture Partners, and a number of people, including Taavet Hinirikus, the co-founder and former CEO of Wise (nee TransferWise). Recko, which was founded in 2017 and located in India, had been gaining a lot of traction abroad, with customers such as Deliveroo, Meesho, and PharmEasy. (Getting on Stripe’s radar may have been triggered by that base and the overlap it has with Stripe’s client base.)
Stripe will begin incorporating Recko into its larger payments stack, although existing Recko users will be able to continue to use the service as usual. According to what I’ve seen, the plan is not to limit any of the product’s capability, which is partly effective now because of how exactly it works across so much of the fragmentation that already exists in the accounting and financial sector.
Stripe bought Bouncer to integrate card verification and TaxJar to add automatic sales tax tools earlier this year. Paystack in Nigeria and Touchtech in Ireland are two examples of international acquisitions undertaken purposefully to serve a broader network of territories and tap into local experience in those areas. Both of those boxes are checked Recko. Stripe has also launched tools and products that handle other areas of the payment process, such as revenue recognition, billing, and invoicing.
Stripe’s moves are part of a larger fintech consolidation: a number of strong players have emerged covering very specific “point solutions” in the wider payments ecosystem, and the stronger platform providers (including Stripe) are now making moves to bring all of these together in the name of greater convenience and efficiency for users, as well as better margins for Stripe.
In a blog post announcing the deal, Stripe’s chief product officer, Will Gaybrick, stated, “Payments reconciliation shouldn’t be a slight pain that turns into a migraine as a company grows—it should be a straightforward, highly automated process.” “From subscriptions and invoicing to revenue recognition and bookkeeping, Stripe helps millions of businesses across the world streamline their revenue management.” We’ll streamline their payments reconciliation with Recko, which is an important input into their overall financial health.”