PayPal-backed Modulr snaps up first acquisition

A PayPal-backed UK fintech that offers white-label payment infrastructure for businesses has made its first acquisition and more could follow, says its boss. Modulr, which calls itself an “embedded payments platform", has acquired London-based Nook, in a cash deal for an undisclosed amount.

Modulr, which has an Electronic Money Institution (EMI) licence, provides payment services for the likes of Sage and Ripple. Its client roster runs across fintechs and bigger businesses. It processes over 200m transactions and over £100bn of payment value on its platform, on an annualised basis. 

By using Modulr’s tech, its clients circumvent the need to build their own payment infrastructure, become regulated and run a payment network. By acquiring Nook, Modulr says it is beefing up its offering.

While Modulr focuses on the payment execution part of the payment journey, Nook specialises in simplifying the accounts payable workflow, offering the full invoice lifecycle management from receipt, through approval to payment and reconciliation with accounting software.

Myles Stephenson, CEO and founder, Modulr, said:

“By combining Nook's AP automation platform with our embedded payments expertise, we’ll be able to provide our existing and prospective customers with even more products that save time and money for busy business owners and accounting professionals.” 

Stephenson said Modulr did consider building a similar offering to Nook in-house but the time to market would have taken too long, between 18 months and two years. The four-strong team at Nook, which was founded in 2020, will join Modulr.

Stephenson said more acquisitions could follow suit “if there are suitable businesses out there”. In July this year, it was revealed that Modulr had a temporary FCA ban on onboarding some new customers, known as partners, lifted but Modulr must give the financial regulator 10 days notice when onboarding new customers.

Stephenson said he expected this notice to be lifted in the future. Modulr last undertook a fundraise, around £83m, in 2022, led by General Atlantic. Other investors in the round included Blenheim Chalcot, Frog Capital, Highland Europe, and PayPal Ventures.

Stephenson said the fundraising meant that Modulr had enough cash to fund Modulr to profitability and beyond.

“We are very close to breaking even,” he added.