The expense management arena is A crowded onewith well-funded players like Brex, Ramp, and Navan all clamoring for market share.
These companies generally focus on technology startups and large companies. But the four-year-old competitor, coastseeks to go after a different type of customer – companies that have so-called “real-world” field employees and fleets to manage as Trucking companies, plumbers, HVAC companies, or last-mile delivery companies.
Founded in late 2020 by Daniel Simon, Coast describes itself as “the modern financial services platform for the future of transportation.” It compares itself to the likes of Ramp and Brex in that it has developed expense management software for fleet operators and their employees. To this end, and as with the spend management companies mentioned above, Coast has created a merchant charging card designed for companies that operate fleets of vehicles, as well asThe niche focus has served the company well. While Coast declined to reveal actual revenue numbers, CEO Simon told TechCrunch that it saw a roughly 550% increase in annual revenue and growth in payout volume in 2023. This growth has prompted its existing investors to double their investments in the company, while attracting a new backer. also. . Coast announces today that it has raised an additional $25 million in venture capital and $67 million in debt financing.
BoxGroup and Avid Ventures co-led the equity raise, while other existing investors such as Accel, Insight Partners and Better Tomorrow Ventures participated. Vesey Ventures has joined as a new backer. Silicone Valley Bank (as a division of First Citizens Bank) and Triple Point Capital are providing a debt capital commitment. Other investors include the FinTech Fund And a long list of institutional angel investors like Max Levchin of Affirm, William Hockey of Plaid, Itai Damti of Unit, Ryan Petersen of Flexport, Jason Gardner of Marqeta, Laura Spiekerman of Alloy, Tommy Nicholas, and others.
Simon refused to reveal Coast's new valuation, saying only:The round represents a significant step compared to the company's previous Series A. In February 2022, the coast It raised $27.5 million In project financing Co-led by Accel and Insight Partners. With the recent increase – which Simon described it as “not an extension of Series B or Series A” but more of an internal round – The company received more than $56 million in stock.
Specialized focus
Historically, fleets have turned to specialized fleet and fuel credit cards that provide controls such as restricting purchases to only certain grade fuel products or tracking expenses on a per-vehicle basis. But Simon says companies selling such cards were founded decades ago with very little innovation since then.
Coast has thousands of customers operating fleets in service industries such as HVAC, plumbing, landscaping and pest control. building; government fleets; And long distance trucking.
“Fleets like this have data needs that regular corporate cards don’t provide,” Simon told TechCrunch. “They need item-level visibility into their employees' spending. For example, they want to know how many gallons of fuel grade are being purchased for each vehicle.
For example, in addition to ensuring that expenses comply with company policy, a fintech startup He said that the company has linked its accounting tools with vehicle information technology and fleet management programs in an attempt to provide real-time data on the vehicle’s condition and location.
By offering mobile login and data collection via SMS, Coast claims it can “improve safety and convenience for drivers and data quality for managers.”
The company makes money by earning interchange fees from the merchant when its customers use the Coast Card to make purchases. It charges customers a flat subscription fee of $4 per month for each card actively used to make payments that month.
It also offers a customer a 2-cent rebate for every gallon they purchase as well as other discounts when customers shop with its partners, including 7-Eleven/ highway, RaceTrac, Discount Tires and Casey's.
Double
Addie Lerner, founder and managing partner of Avid Ventures, told TechCrunch that the recent injection into Coast makes the startup one of the “largest positions” at her company. She said Avid was impressed by the company's appeal to general non-fuel spending as well as larger mid-market fleet customers.
“The Coast product certainly embodies elements of the sleek modern software and cards from Ramp and Brex, but goes even further with fleet-specific features carefully built into the product,” Lerner wrote via email. “The combination of payments and software designed specifically for a neglected industry makes Coast very compelling.”
She described Coste's business as being a “very difficult, high-margin business.”
“We look at established, multi-billion-dollar providers in this space to understand how large (and profitable) these companies are,” Lerner added, pointing to companies like Weeks and Fleetcore.
Simon, who previously co-founded consumer finance startup Bread, Which was sold to Alliance Data Systems For more than $500 million in 2020, TechCrunch said the new capital will go toward expanding Coast's capabilities and offering a broader range of financial products to fleet operators.
Coast is also actively hiring. At present, it has about 60 employees.
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