BlueSnap and Tipalti are on different sides of the payments industry, but both believe targeting their cross-border digital payments services at the middle market is a winning strategy, mainly because so few companies in that arena have shifted their business online.

"The big change in the market now is that everybody's moving to digital payments," BlueSnap CEO Ralph Dangelmaier said in an interview this month.

Waltham, Massachusetts-based BlueSnap aims to help its middle-market clientele accept payments from all over the world, while San Mateo, California-based Tipalti wants to equip middle-market companies with the software they need to make cross-border payments to suppliers and partners worldwide.

Both companies are private and growing fast to grab a larger slice of a trillion-dollar market their CEOs say has barely been penetrated. They have also both attracted significant private investment, and don't have immediate plans to sell shares to the public.

Tipalti, founded in 2010, currently helps its middle-market customers process $20 billion in payments annually, said CEO Chen Amit. For Tipalti, middle market means companies with anywhere from 50 to 1,000 employees and Amit estimates that only about 4% of those businesses have digitized their payments. 

"It's not working in this world to push checks and invoices from desk to desk," Amit said in an interview this month. "You need some way to digitize your financial operations."

Tipalti competitors also targeting the middle market include AvidXchange, MineralTree and Bill.com. Still, Amit said two-thirds of Tipalti's business isn't contested. 

Of the other third, Amit estimates Tipalti wins about 80% of the work mainly because of his company's global reach, including meeting currency and compliance needs outside the U.S. 

The company's customer count is about 1,400, according to its web site, and services those customers with 480 employees. It aims to expand, principally in the U.S., in large part by adding more sales personnel, Chen said. The company is also enhancing and expanding its product suite, moving beyond accounts payable and invoice processing. "There are more parts of the CFO office work that we can help with," he said.

In addition, acquisitions are part of the plan for future growth, with the Tipalti last week announcing the acquisition of cloud procurement software provider, Approve.com. "It's important for our growth to do acquisitions as well," Amit said just days before the purchase. 

So far, the company has raised nearly $280 million, including $150 million last year, that gave it a $2 billion valuation, he said. Amit declined to provide Tipalti's annual revenue. Durable Capital Partners and Greenoaks Capital are among its investors.

For now, Amit doesn't need public shareholder capital to pursue the plans. "I'm not in a rush to go public. I can do more in the private market," he said. "There's a lot of strength from doing things in the private market," he said.

At BlueSnap, Dangelmaier agrees there are benefits to remaining private and keeping operations out of the spotlight. For now, he expects to pursue another round of private fundraising to answer the market opportunity. BlueSnap doesn't have any immediate plans to go public either, but Dangelmaier is not ruling it out as a possibility sometime this year. 

BlueSnap seeks to sell to middle-market companies with between $2 million and $1 billion in annual revenue, he said. Its current customers include the gift company Edible arrangements; software company Jamf; and online genealogy company MyHeritage. He said the company recently landed two new car-maker clients, but he declined to name them.

The middle-market client set is "huge" and "massively underserved," Dangelmaier said. "We're trying to get the word out and that's challenging because we're not the biggest company in the world." 

BlueSnap has 200 employees and has raised about $80 million from private investors. Dangelmaier wouldn't disclose BlueSnap's annual revenue, but said the company is profitable. 

Rivals that can compete in the cross-border arena with BlueSnap include Stripe, PayPal's Braintree unit, Adyen, and Checkout.com, but those players aren't necessarily showing up in the middle market, Dangelmaier said.

BlueSnap's private equity owners Great Hill Partners and Parthenon Capital have been content to stay private, but with the stock market's continuing climb upward, Dangelmaier suggested that could always change. "We could just jump up and go public by the end of the year," he said.