The company has grown to eight full-time employees and posted revenue of $4.8 million in 2018, results good enough to place the company on the Inc. 5,000 list of fastest growing private companies for the past four years. Municipay currently serves roughly 1,400 municipalities throughout the country, including the City of Portland, providing them with one web-based platform that allows them to accept payments across disparate departments, from parks and rec to parking to business licensing. Nonni projects the company will increase revenue to roughly $6 million this year as it gets ready to unveil a major upgrade to the platform.
“There are roughly 50,000 cities and towns in the U.S. so we have barely scraped the surface,” Nonni told Maine Startups Insider.
Until recently, Nonni helped lead Municipay while also serving as CEO of Nationwide Payment Solutions, which he founded in 2002 to provide payment processing services to merchants and other business customers. Nonni co-founded Municipay with Patrick Allen and spun it off of Nationwide in 2009.
Related: Read an in-depth Founder Forum interview MSI conducted with Nonni in March 2017.
Selling Nationwide
Nonni sold Nationwide in March 2018 to EVO Payments Inc., though he agreed to stay on to help the transition, so his last day at Nationwide was Feb. 25 of this year. The next day he was at Municipay and ready to give it his full attention.
“As with many startup ventures, the most exciting part is in the early stages when you are first growing the business,” Nonni said. “This is where I have the most enjoyment. However, once the business becomes well established, it starts to become increasingly difficult to maintain the same level of excitement.”
Nationwide provided 24/7 support for more than 20,000 business owners in several different industries who used more than 1,000 different types of point-of-sale systems. Nonni said there’s no doubt that part of Nationwide’s success was this commitment to customer service, but he said growth can take its toll.
“The effort to maintain that level of support for the retail side of the business was becoming increasingly challenging. Add in increased competition, the ease to lose a retail customer over reduced margins, significant increases in overhead to maintain compliance, security and hardware upgrades, simply put, it was time for someone else who was more scalable to bring new energy and ideas to further grow the business,” he said.
Nationwide is the third Portland-based financial payments company EVO has acquired, following PowerPay in 2012 (which established EVO in PowerPay’s offices in the former Portland Public Market building) and Vision Payments Solutions in 2017.
Nonni wouldn’t disclose financial details of the transaction, but EVO went public shortly after the acquisition and in its filing with regulators revealed that it paid $20.7 million for 38% of Nationwide (it already owned 62% of the company due to an earlier transaction). EVO absorbed nearly all of Nationwide’s 65 employees into its local operation, according to Nonni.
Focus on Municipay
Given the aforementioned business challenges and the fact EVO was already the majority shareholder, Nonni said focusing on Municipay wasn’t the sole purpose for the sale, but it is a perk.
“We knew that Municipay was unique and offered a much higher value solution than that of retail,” he said. “So yes, the idea of refocusing our effort to grow Municipay was very attractive to us. I have full confidence that Municipay will be an equal to or better success long term to that of Nationwide.”
The major focus for Nonni and his co-founder will now be rolling out a major upgrade to the platform, which he calls Municipay V2.0, or just M2. The platform upgrade, which includes a patent for the ability to aggregate multiple transactions simultaneously, was funded in part by the Maine Technology Institute. Nonni said the enterprise-level upgrade will allow the company to attract larger cities as customers and plans to launch its first marketing campaign to reach them this summer.
Looking further ahead, Nonni believes that the Municipay platform his team has developed could be duplicated and marketed to other areas where one organization has to manage payments from various sources, like educational institutions and medical facilities.
“I see no reason why Municipay will not experience significant growth over the next several years,” Nonni said.
CLuster effect
Nonni is an excellent example of how industry clusters can cultivate talent and lead to new startups in the space. Before founding Nationwide Payment Solutions and Municipay, Nonni worked for First Merchants Bancard Services, one of the early Portland companies credited along with WEX and a few others with developing the cluster. An out-of-state company acquired First Merchants in 2002 and closed the Portland office, leading to former employees founding PowerPay, Vision Payments Solutions, and Nationwide Payment Solutions (all of which have since been acquired by EVO).
[If you want to learn more about Portland’s cluster of financial technology companies—think: WEX, CashStar, BlueTarp Financial, Bottomline Technologies, Municipay, etc.—and how it developed, I dug into the topic for the Portland Press Herald in 2014. I traced the origins of the cluster to four payment-related companies, only one of which (WEX) still exists today.]
