When Flint Lane founded Billtrust 17 years ago, the electronic billing field was crowded. Most people recognized that electronic payments would be faster and more efficient than the old “checks in the mail” system that sent billions of dollars through the U.S. postal service every week. But Billtrust had an important advantage over its many competitors: in addition to offering electronic payments, it still had a foot in the paper world, offering printing services as well.
By 2001 most companies had concluded that electronic billing was the future. “We were not the only ones who reached that conclusion,” says Lane, who is still CEO of his company. “We did solve it differently. Many companies offered electronic billing only, but we believed that was a flawed approach. We believed that businesses don’t want to buy e-billing on its own, and a paper billing company on its own. We believed they wanted one billing company. We were willing to build paper mail capabilities, and use it as a marketing vehicle to drive adoption of electronic billing. A lot of people thought we were crazy in the early days because we were building print mail facilities.”
If anything, Flint Lane turned out to be crazy like a fox. Last week, Billtrust celebrated the opening of its new headquarters at 1009 Lenox Drive, a 90,000-square-foot facility in Princeton Pike Corporate Center. Bradford Fenlon of Colliers International represented Billtrust in the transaction, while Steve Tolkach of Newmark Knight Frank represented Vision Real Estate Partners, owners of the Lenox Drive complex. The Lawrenceville space is the company’s sixth headquarters since its founding.
Today Billtrust counts Coca-Cola, Federal Express, Staples, and many more of America’s largest corporations as its clients. Lane says Billtrust now employs 500 people between its corporate headquarters, two additional corporate offices in Chicago and Denver, and its three print mail facilities (in California, Illinois, and at 11 South Gold Drive in Robbinsville.) He expects the company to have more than 1,000 workers over the next three or four years.
The facility at 1009 Lenox Drive was featured in a U.S. 1 article highlighting the transformation of 1980s-era office buildings into modern spaces. (U.S. 1, October 11, 2017.) Architect Joshua Zinder recently redesigned the building’s main atrium, which he said previously “looked like 1988 exploded all over it” and added a staircase, a waterfall, and a large decorative wooden structure that made the area feel less cavernous and more welcoming.
The new building also boasts amenities such as a coffee bar and a fitness center for Billtrust’s workers. Lane says Billtrust will be hiring “across the board.” Sales, marketing, customer service, developers, testers, back office staff, human resources and administration personnel will all be needed. Lane says he believes the company will stay put on Lenox Drive for a while, since there is room to build another building next door on the campus if future growth demands it.
“I’ve said that before,” he says.
Billtrust was previously located on American Metro Boulevard in Hamilton, and all of its previous headquarters had been in the area. But the company had been pondering a move out of state. In 2017 Lane decided to keep the company in Mercer County. A major contributing factor to this decision was a tax incentive from the state Economic Development Authority. In return for promising to keep 228 of its New Jersey employees in place, and to hire around 200 more, Billtrust receives $1.3 million in tax credits every year.
Lane grew up in Long Island, where his mother was a librarian. His father died when he was young. “My mom repeated just about once an hour that I was smart and I could do anything I put my mind to,” he recalls. “It got so annoying, I probably just internalized it.” Today, he says, that attitude is part of the company culture. “We believe we can figure out any problem.”
Early in his career, Lane says he was a “technology guy.” He majored in computer science at Rensselaer, graduating in 1988 with the goal of becoming a programmer. In the 1990s he worked for Logic Works, headquartered on Alexander Road. In 1998 he left that job to found Paytrust, a company that tried to bridge the gap between paper and electronic bills by scanning paper bills and putting them online. You would get your bills sent to Paytrust, which would then present them to you online for you to pay.
The company never took off like Lane thought it would, and it was bought out by a competitor, Metavane, in 2002. The experience taught Lane many hard lessons that he put to use in his subsequent venture. Paytrust presented itself as a more convenient option for consumers, who would pay the company $7.95 a month for the convenience of receiving their bills on a “virtual bookkeeper” via webpage and would pay them automatically if desired. (This was long before most companies offered electronic billing and auto-pay to their customers.)
Paytrust faced the challenge of getting a customer base used to licking stamps to make the switch to the Internet. The company decided a massive ad campaign was needed.
“For the first 18 months, we spent $75 million on advertising on the radio,” Lane says. “But there were some fundamental flaws in the business.” One was that in order to make the business work, Paytrust had to actually open bills and scan them. “Handling paper is super expensive,” Lane says. He tried to fix this problem by getting companies like Comcast and Verizon to submit their bills electronically. All of them wanted to do it, but none had the technological capacity. “They could barely get a bill on their own website, much less do it for a third party,” Lane says.
Paytrust eventually had about 100,000 customers, which wasn’t enough. Even though Paytrust never took off, Lane impressed investors with his innovative approach. He left Paytrust in 2001 and founded Factor Systems, which later became Billtrust.
One early investor was Witherspoon Street-based Edison Partners, a venture capital firm, which made a major investment in Billtrust in 2006. It was Billtrust’s sole institutional investor for years. Edison sold its stake in the company in May for a 10 times return.
“Billtrust Founder and CEO Flint Lane was a visionary in 2001, continues to be the leading innovator in B2B billing payments, and pioneered payment cycle management today. He saw the opportunity in this market before the [financial technology] ecosystem declared enterprise-focused Fintech a ‘cool’ sector,” said Chris Sugden, managing partner of Edison. “Flint and the entire Billtrust team epitomize the founders, CEOs, and growth-stage businesses we aim to serve.” Edison did not disclose financial details about its investment. However, a U.S. 1 article from 2007 lists Edison’s investment at $4 million
Unlike Paytrust, Billtrust focuses not on consumers, but on businesses. This approach has been more successful and has led to explosive growth in recent years. It started with smaller companies. By 2006 it specialized in companies that sent out between 50,000 and 100,000 bills per month. A typical customer was Maurice Electrical Supply, a regional distributor of electrical materials. Since then, Billtrust has worked its way up to serving corporate giants.
“In the first 12 to 13 years, we were educating the market about the need for our solution,” Lane says. “Now there’s significant interest around what we’re doing.” Last year the company raised $50 million in private financing.
Lane says that as electronic billing catches on, paper bills are becoming a smaller part of Billtrust’s business. But he doesn’t see the paper bills going away any time soon, since companies still have to deal with other businesses that use older methods. “I think lots of people don’t realize the amount of commerce that is done via U.S. mail,” Lane says. According to a Goldman. Sachs report, business-to-business transactions globally were a staggering $120 trillion a year, with admnistrative costs totalling $2.7 trillion, 80 percent of which was paid by small businesses. “There is a huge paper issue in the financial supply chain,” he says. “It’s a global issue that leads to lots of deforestation and lots of inefficiency and lots of expense that is really unnecessary.”
The reason, he says, is that sending a paper bill, inefficient though it may be, is relatively easy. A company only needs to know the customer’s billing address.
“It’s not that dissimilar from a payroll company,” Lane says. “Most people think of payroll as auto-deposit, but lots of people still do paper checks. So when you hire a payroll company, you want both.”
Nowadays being on the Internet is no longer “cutting edge business” but merely “business.” In the Fintech world, much of the buzz about future technology is around blockchains and artificial intelligence.
Blockchain, the decentralized, distributed database technology that Bitcoin uses to verify payments (U.S. 1, September 19, 2018), is of little interest to Lane. “We’ve investigated it quite extensively, and no we don’t do anything with it,” he says. “There’s a fallacy that blockchain is going to solve everything from farming to banking to money movement. And blockchain does have some use cases. But we get zero asks for that from our clients. We have a great solution, and we don’t need blockchain to power our solution.”
The same is true for “cryptocurrencies” that use blockchain ledgers as alternatives to sovereign-issued currency like the dollar. Lane doesn’t see companies doing business in Bitcoin anytime soon. “The next question we get about Bitcoin from one of our customers will be the first question,” Lane says.
Artificial intelligence, however, has become a key part of the business. Lane says that Billtrust uses AI to help clients make consistent decisions about whom to extend credit to, since many business-to-business transactions are done on credit. At a paper company, for example, “You’re not going to send a truckload of paper to someone, because who knows if you’re going to pay me?” Lane says.
Billtrust’s AI platform is used by companies’ credit managers — the corporate equivalent of a loan officer — to decide which business partners are credit worthy. Lane says AI can help companies make these decisions with consistency, since a purely human determination would result in different outcomes depending on who was making the decision. He says the system hasn’t replaced credit managers but helps them do their jobs. “It empowers workers to make better decisions and take less risk,” he says.
Now that Billtrust is dealing with some of the largest companies in America, it is looking overseas for future growth. “We are the market leader in the U.S., but not globally. That is our North Star that drives our behavior on a daily basis.”
And if Billtrust achieves its goal, will it move a seventh time?
“I’ve said no to that before,” Lane says. “I’m hoping that this will be our last headquarters location. But I don’t have a great track record on that question.”
Billtrust, 1009 Lenox Drive, Lawrenceville 08648; 609-235-1010. Flint Lane, founder and CEO. www.billtrust.com.