The fintech startup automates B2B payments
cherry is a new fintech startup that automates B2B payment processing for medium and small businesses, starting with the nursing home industry. Today they are announces a $4M Seed round led by NFX.
Here are 3 reasons why we support them.
Despite 40+ years of accounting automation, the vast majority of businesses still spend dozens of hours each week dealing with manual invoicing, payment processing and record keeping. These activities prevent managers from focusing their time on things that have a greater impact elsewhere.
The biggest challenge is lack of visibility. Still today, in 2022, when a seller sends an invoice to a business customer, they usually still need to call or email the customer to ensure that the invoice was received, approved and recorded so that payment can be expected on time. .
Not only does the buyer have to deal with these calls from sellers, but for the buyer, even after they send a check, manual communication is usually required to ensure that the payment was posted to the correct invoice.
These disconnects leave the door open to fraud and legal liability, slow the company’s revenue growth, make revenue more difficult to predict, and are, frankly, work that no employee wants to deal with.
This is a great pain point for most businesses in the United States. Thus, the possibility of solving that pain with one network is great. Such a network will provide automatic alerts and automatic error checks, it will connect and synchronize different payment rails, thus allowing businesses to focus on their core activities.
Cherry is building this network to track invoices and payments digitally.
Cherry co-founder Moshe Teitelbaum founded the company after spending 20+ years in companies that struggled with manual processes related to back-office accounting tasks. He led a group that processed payments to over 500 vendors monthly, a volume level that amplified the pain points of these disconnected, outdated processes—and gave him insight into how to do things better. He basically built Cherry for himself.
Because of the strong founder-problem fit, product-market fit came quickly. Less than a year old, Cherry already resides in 500+ nursing homes and real estate facilities and has already processed $300 million in 100,000 transactions.
Cherry’s team
Nursing homes and real estate facilities are a great starting point for Cherry’s payment network due to their high number of paper checks and customers/expenses. The founders also know these customers well and the industry trusts them.
With it as a beachhead, Cherry can network with suppliers to other companies on the demand side to expand the network. As we say: “If you find the white hot centeryou’d be surprised how these network businesses are bleeding into other verticals.”
As we often discuss, Embedding is one of the most powerful defense options a company can adopt. Embedding is how your product can essentially become one with the customer’s business. Once embedded, it is very difficult to tear out the company. The replacement cost is high.
This is what Cherry does. By embedding their digital business network deep into their customers’ accounting and payment trail, essentially becoming an integral part of their accounting flow.
After embedding their software, they then build a marketplace network effect between thousands of demand-side buyers and 10,000s of sellers/suppliers. When the software is embedded in a node on each side, that node is trusted, speeding up transactions, reducing legal and compliance risks, and reducing costs and hassles.
To help with both embedding and network effects, Cherry ensures maximum compatibility by working with all banks and payment types (e.g., checks, ACH, EFT, wire transfers, and credit and debit card payments) and more than a dozen accounting applications, including QuickBooks Desktop, QuickBooks Online, Sage Intacct, Yardi, Workday, Netsuite, Acumatica, RentManager, PointClickCare, Reliable Health Systems and others.
As they continue to add more integrations and nodes to the network, Cherry will only become more valuable to its customers.
To learn more about Cherry and use it in your business, visit:
