Aug. 11, 2022
A financial tech company grown in the Sioux Falls area has completed a $30 million equity raise that will spin it out from its Kansas City-based parent company.
Central Payments is the country’s fastest-growing prepaid card issuer. It was founded by Trent Sorbe in Dell Rapids in 2014 with Central Bank of Kansas City with a vision of reaching low- and moderate-income consumers with payroll cards, prepaid cards and remittances. It has an office now in downtown Sioux Falls.
The bank will continue as an investor, issuer and strategic partner.
The capital raise was led by Castle Creek Capital, which has offices in San Diego and Dallas, with investment from California-based Launchpad Capital.
“Since inception, we have remained steadfast in our belief that new technology and the stability of a bank charter create opportunity for banks in fintech and embedded finance, while others may have perceived a threat,” Sorbe, who serves as president of Central Payments, said in a statement.
The business developed a cloud-based technology that allows companies to integrate with it to offer payments anywhere in the world. Sorbe is the inventor on 14 patents related to consumer financial services.
The company settled more than $2 billion in transactions last year, putting it 17th nationwide in terms of issuing volume, Sorbe said.
“We see the future opportunity for banks in embedded finance and fintech. Central Payments’ team of fintech bankers and its Open*CP API platform are lynch pins for those relationships,” said Tony Scavuzzo, managing principal at Castle Creak Capital. “Trent and his team at Central Payments saw this opportunity and executed on it before most knew what ‘banking as a service’ meant.”
Proceeds from the capital raise will be used to facilitate strategic growth initiatives such as additional investments in technology, product and staffing.
Central Payments also is making donations to commemorate the milestone in the communities where it does business. That includes a contribution to Startup Sioux Falls. In Dell Rapids, where the company was founded, it will make a donation to help complete a community dog park in memory of Maria Forrest, one of Central Payments’ original employees and a lover of animals, who died in 2019. The company also will make a donation in her name to the local Humane Society in each community where one of Central Payments‘ remote staff members resides.
The Central Payments leadership team remains intact, and a board of directors is expected to be announced shortly. Soon, the company will share what it called exciting plans for its Falls Fintech accelerator, which focuses on fast-tracking market readiness for early-stage financial technology startups.