Block rival SpotOn lands $300M at $3.6B valuation after doubling ARR last year

Payments and software startup SpotOn has closed on $300 million in a Series F financing that values the company at $3.6 billion.

Dragoneer Investment Group led the latest round, which included participation from existing backers Andreessen Horowitz (a16z), DST Global, Franklin Templeton and Mubadala Investment Company, as well as new investor, G Squared.

The investment marks SpotOn’s third raise in the past year alone and Dragoneer’s sixth time investing in the company over a three-year period. It is, however, the first time the firm has led a round. It comes on the heels of a year in which the company says it saw 100% year-over-year ARR (annual recurring revenue) growth.

Last September, SpotOn announced it had closed on a $300 million Series E round at a $3.15 billion valuation. That funding event came just three and a half months after the startup raised $125 million at a $1.875 billion valuation (an a16z led both of those rounds).

Since its 2017 inception, SpotOn has been focused on providing software and payments technology to SMBs with an emphasis on restaurants and retail businesses. Last year, it acquired Appetize in an effort to extend its reach to the enterprise space.

Today, SpotOn — which operates a SaaS business model — says it serves businesses “of all types and sizes,” from local family restaurants to Major League Baseball stadiums. But it is primarily focused on businesses in the retail, food and hospitality sectors.

In the eight months since its last raise, SpotOn has bought another company, released a new product and hired new execs. Late last year, it acquired Dolce, a labor management startup which streamlines payroll, scheduling, tip-pooling and compliance, in an effort to strengthen its flagship restaurant product.

The company also launched SpotOn Retail, which it describes as “an omnichannel retail platform that allows independent retailers to compete with big-box stores and e-commerce giants by selling in store, online or on the go through one seamless, intuitive dashboard.”

It also has made a number of executive hires, including naming Lisa Banks as its chief financial officer. While SpotOn did not comment on any potential plans to go public, the hiring of a CFO typically indicates that the public markets are in a company’s sights.

“Mom-and-pop restaurants and retail businesses are facing rapidly changing consumer expectations within today’s tech-driven landscape. SpotOn has made it their mission to provide customized solutions to drive the growth and adaptation needed as businesses of all sizes evolve and grow,” said Marc Stad, founder and managing partner at Dragoneer, in a statement.

In the broader fintech landscape, SpotOn is taking on payments giant Block (formerly Square) head on. Block, which acquired BNPL player Afterpay in a surprising $29 billion deal, today has a market cap of $48.5 billion. It is also challenging decacorn Toast on the restaurant side.

Interestingly, perhaps as evidence of the global private market correction, SpotOn’s valuation increase was less dramatic than it has been in the past 18 months. So while it was not a flat round, it was about $500 million higher, or a 14.3% increase, compared to its last raise. For context, SpotOn’s Series E raise at a $3.15 billion valuation was about 5x of its $625 million valuation at the time of its Series C round.