Atomic: Revolutionizing Payroll in Fintech

1. Summary

• Atomic is at the forefront of transforming financial technology with its innovative payroll API solutions, offering consumers unprecedented access and control over their financial data. By connecting users to their payroll information and integrating with third-party banking applications, Atomic enhances financial accessibility, particularly for vulnerable populations, by facilitating services like income verification and automated payment processes. Significant funding milestones, including a Series A round of $22 million led by Core Innovation Capital and a Series B round of $40 million, underscore strong investor confidence in its mission. Atomic’s strategic advisory board, comprising experts from technology and finance sectors, supports its goals to develop consumer-centric banking platforms and expand its reach to 120 million Americans.

2. Introduction to Atomic

• 2-1. Overview of Atomic as a payroll API provider

• Atomic is recognized as a leading provider of payroll APIs, instrumental in connecting end consumers to their financial data and automating the setup and updating of direct deposits. The company's infrastructure is trusted by notable fintech firms, including digital-first neobanks, alternative lenders, and digital brokerages. Atomic's technology simplifies complex payroll integrations with a single API that supports over 450 unique payroll connections. This includes connections with established payroll providers, modern HR tech solutions, and government systems, allowing Atomic's services to reach approximately 75% of the U.S. workforce, comprising about 120 million workers. The solution enables users to securely connect their payroll accounts to third-party banking applications for services like direct deposit setups and financial data access.

• 2-2. Mission and vision of Atomic in the fintech space

• Atomic's mission is to create a new generation of bank accounts and transform banking applications into consumer-centric platforms. By providing greater access to financial services, Atomic aims to assist the most financially vulnerable members of society, fostering financial empowerment through transparency and trust. This commitment to improving financial access is evident in the partnerships and innovative solutions that Atomic has developed to cater to various consumer needs. Moreover, the company envisions enabling wealth creation for consumers by building enhanced pathways to necessary financial services, thus addressing the challenges posed by the existing financial service infrastructure.

3. Funding History and Financial Growth

• 3-1. Details of Series A funding and its implications

• Atomic raised $22 million in Series A financing, led by Core Innovation Capital, with participation from existing investors Portag3 Ventures and Greylock Capital Management. The funding aimed to expand Atomic's payroll integration platform and grow its team. The company reported that it was on track to reach over 120 million Americans, or approximately 75% of the U.S. population, by year-end. The Series A funding is significant as it demonstrates investor confidence in Atomic's ability to provide transparent financial services for the financially vulnerable.

• 3-2. Overview of Series B funding and its strategic importance

• Just five months after the Series A, Atomic successfully raised $40 million in Series B funding, co-led by Mercato Partners and Greylock. The company labeled this round as 'preemptive,' indicating that it was not actively seeking funding but was approached by investors. The Series B funding allowed Atomic to enhance its offerings further and expand its customer base, which now includes over 70 banks, credit unions, and fintech companies such as Coinbase, Dave, and Propel. The infusion of this capital is considered crucial for meeting growing demand and improving payroll connectivity.

• 3-3. Total equity raised and its impact on Atomic's operations

• With the completion of the Series A and Series B funding rounds, Atomic has raised nearly $80 million in total equity since its inception in 2019. This financial backing has had a positive impact on the company's operations, enabling it to enhance its payroll API offerings and expand its customer reach. Atomic's technologies are now accessible to 120 million Americans, allowing consumers to better manage their financial data, verify income and employment, and automate payment processes, thus improving financial access for many individuals.

4. Formation of Strategic Advisory Board

• 4-1. Purpose and goals of the Advisory Board

• The Advisory Board of Atomic was formed to support the company's mission of building a new generation of bank accounts and transforming consumer-centric applications. The board aims to fuel momentum in the payroll API market, particularly in response to the rapid demand from early adopters.

• 4-2. Profiles of key members and their industry expertise

• The Advisory Board consists of industry leaders with extensive experience across the fintech, technology, and financial services sectors. Key members include: 1. **Susan Ehrlich** - Former CEO of Earnest, she has led significant roles at Citigroup, H&R Block, Amazon, Lending Club, and Simple. 2. **Michael Ferrari** - Entrepreneur known for creating the first SaaS core-processing API, CorePro, and having served in leadership roles at SmartyPig and Q2 Holdings. 3. **Rahul Gupta** - With over 35 years of experience, he has held executive positions at RevSpring and Fiserv, among others. 4. **Charley Ma** - Currently General Manager of Fintech at Alloy, Ma previously contributed to Plaid's growth and development.

• 4-3. Expected contributions of the Advisory Board to Atomic's strategy

• The Advisory Board is expected to provide dynamic perspectives that will be invaluable for Atomic as it enters new fintech verticals and expands its reach with financial institutions. The members' experiences will also aid Atomic in educating policymakers and developing partnerships with existing financial institutions. With their guidance, Atomic aims to save millions of consumers from overdraft fees and high-interest rates through faster direct deposits.

5. Impact on Consumer Financial Services

• 5-1. How Atomic connects consumers to financial data

• Atomic's payroll APIs serve as a crucial link for consumers, enabling them to securely connect their payroll accounts to third-party banking applications. This functionality allows users to set up or switch direct deposit payments and access critical financial data, including verification of income (VOI) and employment (VOE). The integration not only enhances consumer access to their financial information but also empowers them to manage their finances more effectively.

• 5-2. Innovative services offered through payroll APIs

• Atomic has established itself as a market-leading provider of payroll APIs by offering innovative services that transform banking applications into consumer-centric platforms. Through its technology, the company enables fintech solutions that reach over 1.5 million unique consumers each month. Collaborations with major financial providers such as Coinbase, Dave, and Propel exemplify how Atomic's APIs facilitate better financial services for individuals, allowing them to trade, manage benefits, and optimize benefits and retirement planning.

• 5-3. Focus on improving financial access for vulnerable populations

• Atomic is committed to addressing the financial needs of vulnerable populations, particularly those living paycheck to paycheck. The company's initiatives are designed to provide transparent financial services that foster financial empowerment. By simplifying payroll integrations and ensuring that more than 120 million workers can access their financial data, Atomic plays a key role in creating a more inclusive financial infrastructure. The firm's collaborative efforts with organizations like Core Innovation Capital further underline its dedication to enhancing financial access for all consumers.

6. Competitive Landscape

• 6-1. Atomic’s positioning against competitors like Plaid

• Atomic distinguishes itself from competitors such as Plaid by focusing specifically on income stream management. While Plaid primarily links consumer banking accounts to financial services, Atomic's approach allows income streams to be diverted or observed with user permission for verification purposes. Atomic operates under the premise that enhancing payroll connectivity can transform cumbersome processes, such as applying for a mortgage, into a smoother experience. The company emphasizes that its services, including its payroll API, cater to a different aspect of financial data than what is typically provided by competitors.

• 6-2. Specialization in income stream management

• Atomic has specialized in income stream management by offering APIs that enable the automation of direct deposits, income verification, and management of financial obligations directly from users' paychecks. The company’s technology facilitates the secure access to payroll data, which is critical for users needing straightforward verification of income and employment. Enhanced by a service model described as ‘white-glove service,’ Atomic effectively collaborates closely with customers to refine this financial process.

• 6-3. Analysis of customer retention rates and revenue growth

• Atomic reports a remarkable 100% customer retention rate, attributed to its focus on providing a high-quality service experience. The company's revenue demonstrated significant growth, escalating by 19.5x in 2021 and showing a substantial increase of 342% in monthly revenue from December 2020 to December 2021. This growth trajectory indicates not only robust customer engagement but also a successful adoption of its unique payroll connectivity solutions, which is underscored by the total equity raised of nearly $80 million.

Conclusion

• Atomic has positioned itself as a significant player in the fintech industry by strategically leveraging large funding rounds and forming a knowledgeable advisory board, thus enhancing its payroll API capabilities to better serve consumers. The company's ability to connect consumers with financial data through unique income stream management offers a competitive edge over rivals like Plaid. However, challenges remain in maintaining its lead amid rising competition in fintech. The company's remarkable growth rate, evidenced by increased revenue and customer retention, alongside its total equity of $80 million, suggests a bright future. Looking ahead, Atomic’s focus on improving financial services for underserved communities, combined with its strategic partnerships, is poised to redefine the fintech landscape, with practical applications extending to areas like faster direct deposits and reduced financial barriers for consumers.

Glossary

• Atomic [Company]: Atomic is a leading payroll API provider that aims to enhance financial services through innovative technology. By connecting consumers with their financial data, it seeks to empower individuals, especially those living paycheck to paycheck, through improved financial accessibility and transparency. Its strategic initiatives and successful funding rounds underscore its role as a key player in transforming how consumers interact with financial services.

Source Documents

• Fintech Industry Executives from Earnest, Plaid, Fiserv, and Q2 join Atomic Advisory Boardhttps://atomic.financial/insights/fintech-industry-executives-from-earnest-plaid-fiserv-and-q2-join-atomic-advisory-board/
• Atomic lands $40M in funding, just five months after its Series A, to connect banks and fintechs to consumers’ paycheckshttps://techcrunch.com/2022/03/03/payroll-api-provider-atomic-lands-40m-in-series-b-funding/
• Leading Payroll API, Atomic, Announces $22 Million Series A To Build A New Generation Of Bank Accountshttps://www.prnewswire.com/news-releases/leading-payroll-api-atomic-announces-22-million-series-a-to-build-a-new-generation-of-bank-accounts-301397746.html