Rho Technologies secured $15 million in a Series A funding round today, a boost for the fintech in a space packed with AP process management software.

The New York-based tech company plans to funnel the funding into Rho AP, its new automated accounts payable solution that also launched today, Rho Technologies co-founder Alex Wheldon told Bank Innovation.

M13 Ventures led the pack in the investing round, followed by Torch Capital, Inspired Capital and Rogue Capital. This round pushes the fintech’s total funding to nearly $20 million; its previous funding round was in October 2019.

The fintech’s new software will be built into to its banking platform, Rho Business Banking, allowing clients to upload, approve, code and pay invoices in one place. It also integrates APIs into the program to directly connect with accounting software providers like Quickbooks, Wheldon said.

Rho AP joins a crowded field of fintechs automating invoice processing. U.S. Bank launched its AP Optimizer system in November with Bottomline Paymode-X to provide a single interface for its clients to manage invoices and accounts payables. Meanwhile, American Express released its accounts payable solution, American Express One AP in July, which is designed to organize and trigger payments automatically through its virtual credit cards.

Innovation in digital AP platforms is mitigating pain points for executives in the finance world, according to Erika Baumann, senior wholesale banking analyst at Aite Group, adding that it “is giving businesses access to differentiating functionality like real-time payments, choice in payment method, and self-servicing recipient portals.”

However, while the benefits of pivoting away from manual processes cannot be understated, fintechs have struggled with getting a foot in the door of financial institutions, Baumann said.

“The challenges for some of the fintechs is that their scalability and stability have not been proven, outside of a handful,” she continued. “Businesses most often prefer to partner with their bank, so there is a hurdle in direct marketing to the corporates.”

Rho AP automates invoicing, specifically bringing payment authorization upstream in the process and transferring documents between the financial institution and business customer, who are both able to set controls that determine how and where the invoices are shared and dispersed.

“We take the information from the invoice, we help encode it for the client and notify the right people, and get them to approve it,” Wheldon said, adding the software tracks each individual responsible for reviewing and approving the invoice.

Rho is not a lone pioneer in this growing space, and, despite investments by fintechs and banks in automating B2B payments, the market adoption of such these products has been slow. Only 15% of organizations run fully paperless invoice processing operations, according to an Ephesoft survey of 200 accounting and finance professionals released last week. Ephesoft launched its product for automated invoice processing last year, along with U.S. Bank and AmEx.

The use of automated AP systems translates to not only to cost savings — automation can reduce invoice processing by 80% — but also time savings for financial institutions. Prior to the initial launch, Rho conducted beta testing with 20% of its clients and found the software is shaving off at least a quarter of a week’s worth of time, Wheldon said.

“Eliminating the manual processes not only saves time, but improves cash flow and allows for invoices to be sent automatically and tied back to the invoice when payment is received,” Aite Group’s Baumann said. “As financial institutions are falling short of providing full automation of the AP and AR processes, fintechs are stepping in to sell these solutions directly to corporates.”