A gloomy economic outlook and worsening consumer sentiment have not dampened optimism at payments unicorn Zeller, which claims a significant uptick in big business users is propelling its revenue growth.
Zeller, launched by former Square executives Ben Pfisterer and Dominic Yap in March 2020, quickly gained market share in the payment terminal sector through its offerings for small business.
Enthusiasm for its payment processing and small business banking systems soon stretched to the world of venture capital, with subsequent raises in mid-2021 and early 2022 garnering the firm a valuation of $1.1 billion.
Zeller, which first capitalised on payment terminals and business Mastercards for small enterprises, now says larger merchants comprise 60% of its 25,000 clients.
“Recently we’ve really started to move upmarket,” CEO and co-founder Ben Pfisterer told SmartCompany.
While small businesses first adopted the brand’s payment technology for single-site use, Pfisterer says Zeller is increasingly focused on businesses working across a number of outlets, including larger retail and hospitality players.
“We’re starting to see multi-location businesses come on board with us as well, so we certainly want to be able to address any business types’ needs,” he said.
That isn’t to say the company has forgotten its smaller clients.
Although Zeller is now servicing businesses “of formidable size”, Pfisterer acknowledged some major enterprises “might be requiring lending or more complex financial needs” beyond the firm’s area of expertise.
“We expect that portion of big businesses to continually grow, but we’ll never forget or leave behind those smaller businesses because we think they’re the lifeblood of the Australian economy as well,” he said.
The company is also optimistic that its new Xero integration, allowing Zeller-linked businesses to automate their reconciliation processes, will win over businesses hoping to streamline their accounting and bookkeeping processes.
Zeller’s rosy outlook comes as the economic forecast for ventures large and small sours.
November is traditionally a big-spending month as shoppers line up their Christmas plans, but Westpac says consumer sentiment has stooped to levels seen in the depths of the Global Financial Crisis.
Lower spending means less capital flowing towards business — and less opportunity for those enterprises to upgrade their payment terminals.
Soaring inflation will “eventually start impacting the consumer”, Pfisterer says.
Still, his business has observed “a real resilience in the Australian economy”, he adds, potentially drawing from Zeller’s own COVID-era origin story.
“One of the upsides is that businesses are running quite efficiently, they’re being very careful with the way they’re run if you look at their cost base to survive these challenging times,” he said.
“So they’re quite well placed to do well.”
Despite the hit to consumer sentiment, pent-up demand among households and businesses is still strong enough to soften the impact of inflationary pullback, Pfisterer added.
“Over 75% of our businesses still expect that they are confident in growing in the short to medium term.”
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
