Finance Everywhere, Member Exclusive

Highnote emerges from stealth with SMB focused embedded card service

  • Highnote offers businesses end-to-end card issuance, physical and virtual, with a focus on small and emerging companies.
  • The firm says its product is designed to be developer friendly, emphasizing control, flexibility and speed.

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Highnote emerges from stealth with SMB focused embedded card service

Highnote, an emerging embedded finance service provider run by PayPal vets, came out of stealth last week, following its latest round of funding. The firm considers itself the first card issuing platform specifically built for small and mid-sized companies.

Over the years, consumers' expectations have evolved, and they increasingly want to be able to pay directly and instantly, whether they’re sending money to friends or family, or e-shopping for groceries, medicine, or just about anything these days. The answer to that demand in today’s virtual world is ‘embedded finance’. Firms in different industries can integrate payment, lending, and banking solutions into their core offerings through APIs. In just the US, embedded finance is poised to become a $3.6 trillion market over the next decade.

Highnote serves businesses by offering end-to-end virtual card issuance capabilities to SMBs and emerging enterprises. Using their service, businesses can easily embed issuing virtual and physical cards into their existing product offerings using simple APIs. The platform simplifies the entire process, from speed-to-market to issuance, processing, flexible offerings, and partnerships with a variety of card issuance components (card networks, sponsor banks, risk, and compliance).

Speed is a key component of the firm’s value proposition. “Utilizing the Highnote platform, our clients launch card programs in weeks, not months, and create unparalleled value for their customers,” said John Macllwaine, Highnote’s co-founder.

Embedded financial services have been provided by established service providers, whose products are often designed on age-old tech and for large corporations. Their products’ rigidity deems them difficult to adapt to the specific needs of small to medium-sized businesses. 

Highnote markets its product as developer-friendly, saying it is designed to keep control, flexibility, and speed at the center of the experience. The firm’s philosophy is that businesses need multiple iterations of a product or feature to find the right product-market-fit that is ready for mass roll-out. This thinking is reflected in Highnote’s offering, which is designed for flexible iteration, allowing digital businesses to keep pace with evolving trends and innovations.

Highnote’s issuer-processor stack is built on GraphQL APIs, which means customers can customize it as they wish. For clients, this means that they can A/B test, iterate, respond to outcomes, and make better business decisions. Highnote claims their data models and application domains are architected to support configurations and customizations that unlock use cases that are deemed too difficult to be gracefully handled by legacy rigid platforms out there.


In the past year of operations, Highnote has focused on two things; first, the company claims to have put together its team, adding Google, Venmo, and PayPal alumni to their ranks; and second, they’ve used the team to build the its infrastructure. 

“As a full-stack issuer-processor, we’ve integrated directly into the Mastercard network, a build that usually takes years of development, and completed our PCI certification in record time (less than 4 months). In addition, we’ve built everything with technologies that weren’t around 10 years ago (such as GraphQL, Spanner), when many of the incumbents in the space were launched,” Macllwaine said.

In the next year, Highnote expects to enter the BNPL market, adding to its existing abilities. The firm wants to set itself apart in the highly competitive BNPL industry by enabling clients to own the branding as well as all of the data that gets outsourced to other marketplaces. For the long term, Macllwaine said, “We anticipate the platform to provide the scaffolding to create payment experiences and opportunities that can’t even be conceived of yet.”

Highnote’s primary competition in the industry comes most notably from payment platform firms Marqeta and Galileo, among others. However, there's room among the existing service to help SMBs innovate in ways that let them differentiate via embedded finance, even when they lack resources and large developer teams.

Highnote believes existing solutions in the market are, simply put, old. Marqeta was built ten years ago, and Galileo, 20 years ago for a specific purpose and re-engineered as needed, Macllwaine pointed out. Due to the infrastructure they’re built on, it is difficult for these platforms to offer the flexibility that Highnote wants to bring to the table.

Highnote’s founded by PayPal alumni, John Macllwaine, who served as general manager, and Kin Kee, who was previously the director of architecture at Braintree. The two worked together at Lending Club, as well. While working in payments, the pair spotted shortcomings in the space, and together with their anticipation of future trends, Highnote was born. They noted that while the front-end innovations in fintech got better with better customer experiences and frictionless payments, the same was not reflected in the back-end of the technology. This shortcoming revealed itself to the co-founders as a major opportunity.

Established in 2020, the firm likes to call itself “The World's Most Modern Card Platform”. It is powered by a team of over 40 individuals and is headquartered in San Francisco.

Highnote’s joint Series A and Seed funding of $54 million marks the emergence of the PayPal alum-founded company from a stealth mode. Oak HC/FT led the Series A funding and co-led the Seed funding with Costanoa Ventures. Other investors include firms XYZ, SVB Capital, and WestCap, and notable individuals like Bill Ready, the former COO of PayPal and current president of commerce and payments at Google, and Renaud Laplanche, the CEO of Upgrade and founder of Lending Club.

In other related news, Karbon Card, a firm offering corporate cards, announced that it had raised $12 million in pre-Series A funding. Rize, a BaaS that allows end-users to combine different custodial accounts into a single synthetic account, also raised $11.4 million in Series A funding.

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