Runway Growth Capital’s $40M Bet on Autobooks: A Strategic Play in the SMB Fintech Arms Race
15min read The fintech sector is no longer just about apps for consumers. It’s increasingly about infrastructure—tools that power the engines of small and medium-sized businesses (SMBs). Into this space steps Runway Growth Capital, a venture debt specialist, which has just pumped $40 million into Autobooks, a Detroit-based fintech firm that’s positioning itself as a one-stop shop for SMBs’ financial operations. The deal isn’t just about capital; it’s about betting on a future where financial management tools are embedded directly into banking platforms.
The Autobooks Playbook: Building an SMB Financial Hub
Autobooks, founded in 2015, has carved out a niche by integrating payment processing, invoicing, and accounting solutions into the banking ecosystems of financial institutions. The company’s platform allows SMBs to manage receivables, payables, and bookkeeping within their existing banking apps, reducing the need for multiple third-party tools. This “embedded finance” approach has fueled rapid growth: it ranked No. 258 on Inc.’s 2022 list of fastest-growing U.S. companies and climbed to No. 249 in 2023, a testament to its traction.
The $40 million term loan from Runway will primarily fund Autobooks’ 2025 acquisition of Allied Payment Network, which expanded its real-time bill pay and digital disbursement infrastructure. This move wasn’t just about scaling; it was about becoming the go-to partner for banks and credit unions seeking to offer comprehensive financial management tools to their SMB customers.
Why Runway Growth Capital? The Venture Debt Edge
Runway, part of BC Partners Credit (a $8 billion credit firm), specializes in senior secured term loans for high-growth companies that want to avoid equity dilution. This deal fits its sweet spot: $30M–$150M funding needs for firms with scalable platforms. Autobooks’ 2024 trailing 12-month revenue of $123 million and a $425 million market cap (as of January 2025) signal the kind of growth that attracts debt investors seeking predictable cash flows.
The partnership also aligns with Runway’s broader strategy. As a business development company (BDC), it can access public markets to fund private investments. Its affiliate, Runway Growth Finance Corp (NASDAQ: RWAY), recently declared a dividend of $0.35 per share (including a supplemental $0.02), reflecting confidence in its portfolio’s performance.
The Strategic Rationale: Embedded Finance’s Tipping Point
The Autobooks investment underscores a critical trend: embedded finance is moving from niche to mainstream. SMBs, which represent 99.7% of U.S. businesses, are increasingly demanding integrated solutions. Autobooks’ strategy—bundling payments, invoicing, and accounting into banking platforms—cuts costs and complexity for small businesses while creating recurring revenue streams for financial institutions.
Runway’s bet here isn’t just about Autobooks’ current metrics. It’s a bet on the $1.2 trillion SMB fintech market, which is expected to grow at a 7.5% CAGR through 2030 (per Statista). Autobooks’ acquisition of Allied Payment Network, which added real-time disbursement capabilities, positions it to capitalize on this demand.
Conclusion: A Win for Both, a Signal for the Sector
Runway’s $40 million term loan to Autobooks is a strategic win on multiple fronts. For Autobooks, it funds an acquisition that strengthens its embedded finance platform, enabling it to serve more financial institutions and SMBs. For Runway, it’s a chance to back a high-growth company with solid unit economics and a scalable model—key criteria for venture debt investors.
The data tells the story: Autobooks’ revenue grew by over 40% year-over-year (to $123M in 2024), and its market cap has nearly tripled since 2020. Runway, meanwhile, benefits from BC Partners’ resources, which have boosted its origination capacity. This deal isn’t just about capital—it’s about fueling the next phase of the SMB fintech revolution, where integration, simplicity, and speed reign supreme.
In a sector crowded with startups, Autobooks’ embedded finance play has already shown it can scale. With Runway’s backing, it’s now primed to challenge the status quo—and that’s a trend worth watching.
