The field of cost management is crowdedDeep-pocketed players like Brex, Ramp and Navan are all claiming market share.
These companies typically focus on technology startups and large corporations. But the 4-year-old competitor Coastis pursuing different types of customers with so-called “real” field personnel and vehicles to manage. Trucking companies, plumbers, HVAC companies or last mile delivery companies.
Founded by Daniel Simon in late 2020, Coast describes itself as “a modern financial services platform for the future of transportation.” It compares to Ramp and Brex in that they have developed cost management software for fleet operators and employees. To that end, Coast, like the previously mentioned spending management companies, has created a commercial credit card designed for businesses that operate fleets.Cap niche focus has served the company well. Coast declined to disclose specific revenue figures, but CEO Simon told TechCrunch that it expects annual revenue and payments volume to increase by about 550% in 2023. This growth has led to existing investors doubling down on the company while also attracting new backers. . Today, Coast announced that it has raised an additional $25 million in venture capital and $67 million in debt financing.
BoxGroup and Avid Ventures jointly led the equity raising, with other existing investors including Accel, Insight Partners, and Better Tomorrow Ventures also participating. Vesey Ventures joins as a new backer. silicon Valley Bank (an affiliate of First Citizens Bank) and Triple Point Capital are providing the debt capital commitments. Other investors include Fintech Fund. And there’s a long list of founder angel investors, including Affirm’s Max Levchin, Plaid’s William Hockey, Unit’s Itai Damti, Flexport’s Ryan Petersen, Marqeta’s Jason Gardner, and Alloy’s Laura Spiekerman and Tommy Nicholas.
Simon declined to reveal Cost’s new valuation.“This round represents a significant advancement compared to the company’s previous Series A.” Coastal February 2022 $27.5 million raised Venture funding in progress It is co-led by Accel and Insight Partners. With recent hikes — Simon described it as more of an insider round, “not a Series B or Series A expansion.” The company has raised a total of more than $56 million in capital.
Focus on niche markets
Historically, fleets have turned to specialty vehicle and fuel credit cards that provide controls such as limiting purchases to only certain grades of fuel products or tracking costs by vehicle. But Simon argues that the companies selling such cards were founded decades ago and little innovation has occurred since then.
Coast has thousands of customers who operate fleets in service industries such as HVAC, plumbing, landscaping and pest control. erection; government fleet; And long distance transportation.
“Vehicles like this have data requirements that regular corporate cards don’t provide,” Simon told TechCrunch. “You need detailed line-item level visibility into employee spending. “For example, they want to know how many gallons of what grade of fuel they are purchasing for which vehicle.”
For example, in addition to ensuring that costs comply with company policies, fintech startups He said the accounting tool is connected to vehicle telematics and fleet management software to provide real-time data on vehicle status and location.
And by offering SMS-based mobile login and data collection, Coast claims it can “improve security, convenience for drivers, and data quality for managers.”
The company makes money by collecting interchange fees from merchants when customers use their Coast cards to purchase items. We then charge our customers a flat subscription fee of $4 per month for each card actively used to make payments that month.
It also offers a 2-cent rebate for every gallon customers purchase, as well as other rebates when customers shop with partners, including 7-Eleven./highway, RaceTrac, Discount Tires and Casey’s.
double down
Addie Lerner, founder and managing partner of Avid Ventures, told TechCrunch that the recent investment in Coast makes the startup one of her company’s “largest positions.” She said Avid was impressed with the company’s traction with large mid-market vehicle customers as well as non-fuel general corporate spending.
“Coast’s product certainly embodies the sleek, modern software and card offering elements of Ramp and Brex, but takes it even further with vehicle-specific features thoughtfully built into the product,” Lerner wrote in an email. “The combination of software and payments purpose-built for an overlooked industry makes Coast very attractive.”
She described Coast’s business as one that could be “a very sticky and profitable business.”
“We look at the existing, multibillion-dollar vendors in the space to understand how big (and profitable) these businesses can get,” Lerner added, pointing to companies such as: Wex and Fleetcor.
Simon previously co-founded consumer finance startup Bread. Sold to Alliance Data Systems The new capital, which will amount to more than $500 million in 2020, will be used to expand Coast’s capabilities and offer a broader range of financial products to fleet operators, according to TechCrunch.
Coast is also actively hiring. The current number of employees is approximately 60.
Want more fintech news in your inbox? Join TechCrunch FinTech here.