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Corporate Spend Management💳Startups
Welcoming 28 new members of the Fintech Wave community who have joined us since Monday.
For this week we prepared a summary of corporate spend management solutions. Last few months, VC funds invested more than $1B into corporate spending startups. After “Buy Noy Pay Later” craziness (in terms of funding), this is the new space where FOMO is really big. But there is a good reason for that - corporate spending is a $100 TRILLION market, so all of these startups in this space have almost unlimited opportunities to grow considering the market size. So, I decided to do an overview of the current players in the market.
For corporate spending solutions, credit card interchange was the main revenue stream. So, every time employee or business use a credit card, the corporate spend solution earns a small % of each transaction. The more the company spends the more fees they collect. This is still a huge part of revenue, but things are changing.
New startups in this field are switching to actually help customers spend less. Ramp even launched a service that negotiates better prices from vendors to save businesses 30% or more. In the future software will automatically suggest better places to spend or automatically redirect spending, and corporate spend platforms will take an affiliate fee. Also, no more manual expense entry for employees.
Most of these solutions offer the same core products - corporate credit cards and spend management software. I think the best product of these startups is the ability to issue virtual credit cards to employees. Finally, no more 2 weeks waiting time get your company’s Amex, so you can book a trip. Virtual credit cards are instant.
The differences between startups in this space are in the other services that can help users save money and time - for example, an automated reporting that helps accounting book the costs under the right category. This automation saves hundreds of hours per year + everything is compliant with accounting policies.
Traditional banks usually ask for personal guarantees if you want to get a credit card for your business and this could be very tough, especially for small startups or companies. This new generation of spend management solutions doesn't ask for that, so they can acquire all these underserved businesses.
If you are looking for the best solution for your startup or just want to learn about space (to maybe launching your own startup) keep reading.
HQ: San Francisco, USA
Money raised: $1.2B
Features: banking account, credit cards, invoice payment automation, revenue-based financing
Brex is the startup that actually started a new era of corporate management spending startups. Brex founders are one of the youngest billionaires in the world. The company actually built an entire financial OS for high-growth companies.
Although there is nothing about pricing on the website, I found out that they charge $49/month to you for all the products on the platform.
Brex is available for USA companies.
HQ: New York, USA
Money raised: $1.4B
Features: credit cards (virtual and physical), expense automation, invoice management, accounting software, contracts negotiation support
Ramp is one of the fastest-growing companies ever. They recently raised a massive $750M round. The best thing about Ramp is that is free. Corporate cards, expense management, bill payments, real-time reporting, and accounting automation are all free.
Also, they help customers save money for software via Ramp Procurement. Customers just need to upload contracts and Ramp savings experts will negotiate the best price and terms for customers and save up to 30%. How cool is that :)
Ramp is available only for USA companies.
HQ: New York, USA
Money raised: $368M
Features: credit cards (virtual and physical), expense automation, invoice management, revenue-based financing
The great thing about Jeeves is that there are no FX fees. Also, issuing credit cards is free and unlimited. The main selling point of Jeeves is that it is eliminating cross-border payments fees. For example, you can use a Jeeves card in Madrid and pay it back in EUR, while you can use the same card in the USA and pay it back in USD. Excellent solution for the team members that travel a lot.
Jeeves is available in 24 countries in North America, Latin America, the U.K. and Europe
Tribal Credit (www.tribal.credit)
HQ: San Francisco, USA
Money raised: $143.4M
Features: credit cards, spend analytics, working capital lending, subscription management
Tribal is focused on startups and SMEs. Also, they are covering emerging markets such as MENA, Asia-Pacific and Latin America. One cool feature is Working Capital financing - businesses can extend credit card payments up to 90 days (default is 30 days), in exchange for a small fee.
Currently, Tribal is still in the private beta stage, so it is free for all startups that got approval for the beta version.
HQ: Toronto, Canada
Money raised: CA $42M
Features: credit cards (virtual and physical), expense automation, no FX fees
Float is a corporate spend management startup focused on the Canadian market, which is actually their main because they know the local market and regulations. The Canadian market is still big enough to become a $1B company.
Float offers high-limit credit cards without personal guarantees. Apparently, this is a huge benefit and differentiator, because in Canada it is almost impossible to get a business credit card without personal guarantees.
It is possible to use Float for free, but options are very limited (up to 5 virtual cards/month). To use all functions that Float offers you will have to pay a subscription of $99/month, which is a really good price.
HQ: Toronto, Canada
Money raised: $17.6M
Features: credit cards (virtual and physical), expense automation, spending analytics
Not yet been launched, you can just sign to the waitlist. Looking at the products on the website, are almost the same as for Float with a focus on the Canadian market.
Team Pay (www.teampay.co)
HQ: New York, USA
Money raised: $21M
They partner with Silicon Valley Bank to issue credit cards.
For pricing, you will have to talk to sales since there is no information on the website.
Of course, Europe is still behind the USA in fintech products, but there are still very good options for European startups. Europan startups have a bit harder job because each country has its own regulations for lending products, so it is expensive to meet the requirements in each country. Also, there are different currencies in play, but the market is even bigger than the USA.
What is interesting is that while USA companies provide almost everything for free, European ones are charging a monthly fee per user simply because there is less competition.
HQ: Berlin. Germany
Money raised: $150.2M
Features: credit cards (virtual and physical), expense automation, invoice management, accounting software with tax-advisor support
Moss costs €12/month per active user. For larger teams, it is possible to negotiate a better price. Compared to the options for the USA companies, Moss looks a bit expensive. That is €144 per user per year just to use the card and software.
Moss doesn’t say exactly what countries are supported, but I suppose that Moss Debit Card is probably available in the whole EU, but Credit Cards are limited only to a few countries (Germany, Netherlands).
HQ: Zurich, Swiss
Money raised: $107.8M
Features: credit cards (Visa and Mastercard), expense automation, invoice automation
Yokoy is available in over 100 countries, but not all products are available in every country. For example, credit card issuing is available only in European countries which have EUR as currency (+ a few others). Expense management software is supported in almost all countries. Here is the detailed list of availability.
Also, there is nothing about pricing on the website, which is a huge downside IMO. Probably they charge a few EUR per active user per month.
HQ: London, UK
Money raised: $239.1M
Features: bank account, credit cards (Visa and Mastercard), expense automation, invoice automation, employee reimbursements
Payhawk is the Europan version of Brex and they recently became a unicorn. It is probably the best solution for European companies, although it is not cheap. The cheapest version is €149/month + €9 per credit card user/per month.
A good feature is that customers get their own accounts with a dedicated IBAN. They can connect this Payhawk account to their existing bank account to load and withdraw funds. Also, there are no conversion fees with transactions in EUR, GBP, and USD. The solution is available for most European countries.