By CHAD SWIATECKI, Freelance Contributor to Silicon Hills News
It makes sense that the Austin financial technology startup Episode Six would make the Asian Pacific region a high priority as the company sought to pick up customers for its software platform that lets financial institutions build custom payment and other solutions.
After all, while New York and London are still two of the world’s top financial powerhouses, there’s no denying how quickly centers such as Hong Kong, Singapore, and Tokyo have emerged over the past two decades to make up a thriving region that is another center to help money move around the globe.
John Mitchell, the company’s Co-Founder, and CEO said Episode Six’s pursuit of Tier 1 and Tier 2 banks makes it important to play in all of the world’s financial hubs. A recent move into Copenhagen earlier this summer as a tech provider for the fintech startup ARYZE lays the groundwork for the announcement of a New York-based customer expected to come later this month.
The most significant recent news for Episode Six was the closing of a $7 million Series A funding round that included HSBC, Mastercard, and SBI Investment Co., Ltd. among the participating investors. That round closed in July and will give the company the capital it needs to expand its sales, support, and engineering teams to prepare for a planned growth phase that Mitchell said will prove the scalability of the company’s tech. It expects to have 45 employees by the end of the year with more hiring planned for 2021, although Mitchell said the uncertainties caused by the Covid-19 pandemic have kept company executives from stating a target headcount.
Founded in July of 2015, Episode Six develops software for financial services firms, e-commerce companies, and other companies that issue payment products. Customers can license Episode Six’s software to create new digital products.
“We witnessed a lot of change, from the consumer demand standpoint to what companies were putting out to digitization,” Mitchell said by phone recently. “We realized that one of the biggest constraints to being able to innovate was the technology around payments had become unimaginative, particularly around payments. Everything was old, dated, inflexible, hard to work with, and because of that, creating new programs, products, and methods of transferring value was quite difficult.
“We came together to solve those issues and created Episode Six based on that idea, and we created a technology and software platform that enables businesses that have some sort of payment initiatives, ranging from financial institutions to big tech to fintech, to be able to take our software, integrate it into their payments ecosystem and then, through hundreds of APIs, build out programs that they need to meet the needs of their customers.”
The new business with ARYZE will use Episode Six technology to help the Danish company create its Digital Cash product that is intended to be a replacement for existing currencies that will be easier and cheaper to move for payment processing. ARYZE, which is also raising $15 million to fund the launch, sees a $2 trillion market for improving digital payments.
Mitchell said Episode Six’s software platform is needed by large banks and other institutions that are hampered by moldering technologies that often don’t work together elegantly, creating inefficiencies and making it difficult to improve their processes. He said the disruptions caused by the pandemic have created more demand for flexible and innovative payment technology as consumers and businesses move away from physical currency.
“Financial institutions are sitting on multiple systems and layers of legacy systems that are tied together to work and that their book of business relies on, and to untangle that, add to it or change it is a big initiative that takes resources and time,” he said. “There has to be a catalyst and push to get people to move to where they need to go.”
The company doesn’t disclose its revenue or profitability information. Chief Financial Officer and Co-Founder Chermaine Hu said she expects it will triple its current revenue in the next 12 to 24 months.
Anticipating that the company will prove the scalability of its platform with its new hires, Mitchell said Episode Six executives will work on a Series B funding round early next year.
