Dallas Company Secures $110M to Revolutionize Bill Pay via Text

Solutions by Text has undergone a remarkable evolution since its inception in 2008. Initially founded by brothers Danny and Mike Cantrell, the company operated on a bootstrap model until 2021 when Edison Partners injected $35 million into the business. With David Baxter assuming the role of CEO in the same year, the company witnessed a notable shift in its strategic direction.

Under Baxter's leadership, Solutions by Text experienced exponential growth, with revenue soaring to "more than 3X" since its last funding round. While specific revenue figures remain undisclosed, the company's transition from a consumption-based to a subscription-driven model has been pivotal. By the end of the year, pure Software as a Service (SaaS) accounted for approximately 90% of its business, marking a significant departure from its earlier operational structure.

The company's messaging volume witnessed a staggering 95% increase in 2023 alone, indicative of its growing market penetration and relevance. From facilitating real-time customer interactions to aiding in marketing efforts and past-due collections, Solutions by Text has become a cornerstone for businesses seeking efficient conversational messaging tools.

The recent injection of $110 million in growth funding, co-led by Edison Partners and StepStone Group, underscores investor confidence in the company's trajectory. With Stifel Venture Bank providing additional lending support, Solutions by Text is poised to further expand its market presence and solidify its position as a leader in the conversational messaging space.

While Baxter refrains from disclosing the company's current valuation, he notes a substantial increase compared to its previous funding round, indicating a significant appreciation in its market value. As the company continues its journey towards profitability, the infusion of fresh capital will undoubtedly fuel its innovation initiatives and propel its growth aspirations in the competitive landscape of digital communication solutions.

The research report by Solutions by Text and Datos Insights highlights a significant willingness among consumers, particularly Gen Z and Millennials, to engage in bill payments via text messages. With an impressive open and read rate of 98% within five minutes, text messaging emerges as a preferred communication channel over emails, even for industry professionals like Baxter.

However, concerns regarding compliance have hindered widespread adoption of text messaging solutions. Baxter notes that 60% of Solutions by Text's new clients refrained from utilizing text messaging due to compliance apprehensions in the past year. This regulatory complexity has prompted some customer engagement providers to withdraw from the financial services sector altogether.

In contrast, Solutions by Text prides itself on addressing compliance challenges effectively, leveraging features such as provisioned short codes and long codes/10DLCs. This robust compliance framework has attracted a diverse clientele, including prominent entities like Best Egg, eBay, US Bank, regional banks from the Southeast and Midwest, as well as major players in auto loans and digital marketplace lending.

By facilitating real-time communication with customers, Solutions by Text enables its clients to enhance their engagement strategies while navigating regulatory requirements seamlessly. As businesses increasingly seek efficient and compliant communication solutions, Solutions by Text emerges as a trusted ally in the telecommunications landscape.

Solutions by Text's entry into the embedded payments arena last October, in collaboration with Nuvei, marked a significant expansion of its offerings. The introduction of its "FinText" product, designed to facilitate payments through text-based responses like "Pay Now," underscores the company's commitment to innovation and customer convenience. Additionally, Solutions by Text emphasizes its adherence to strict industry regulations by providing pre-vetted, carrier-approved messaging templates.

With the infusion of new capital, Solutions by Text is poised to further enhance its product development initiatives, accelerate its roadmap, invest in research and development, pursue strategic acquisitions, and bolster its AI capabilities. Baxter envisions leveraging AI to create a more personalized and efficient debt negotiation experience, particularly as delinquency rates continue to rise.

Edison Partners' General Partner and COO, Kelly Ford, underscores the company's capital-efficient and regulatory-compliant approach, highlighting its competitive advantage in both financial industry solutions and third-party technology integrations. The decision to double down on the investment reflects confidence in Solutions by Text's performance and a shared vision to expedite growth, particularly in the realm of embedded payments.

As the fintech landscape continues to evolve, Solutions by Text's strategic focus on innovation, compliance, and customer-centric solutions positions it for continued success in meeting the evolving needs of businesses and consumers alike.