Coastwhich aims to help companies control fuel and fleet spend with its expense management software, has raised $27.5 million in a Series A financing co-led by Accel and Insight partners.
The increase comes just seven months after the New York headquarters Coast announced that it had raised $6 million in an initial funding round. existing supporters Avid Ventures, Better Tomorrow Ventures and BoxGroup also participated in the financing, along with new investors Flexport and The Fintech Fund. The company is also backed by a long list of founding angel investors such as Affirm’s Max Levchin, William Hockey from Plaid, Itai Damti from Unit, Ryan Petersen from Flexport, Jason Gardner from Marqeta and Laura Spiekerman and Tommy Nicholas from Alloy, among others.
Founded in late 2020 by Daniel Simon, Coast describes itself as the “modern financial services platform for the future of transportation”. It compares to companies like Ramp, Brex or Airbase as it has developed an expense management software platform for fleet operators and their employees. To that end, and like the aforementioned spend management companies, Coast has created a business charge card designed for companies operating fleets of vehicles such as trucking companies, plumbers, HVAC companies or last mile delivery companies. .
Historically, fleets have turned to specialized fleet and fuel credit cards that provide controls such as restricting purchases to only fuel products in a specific category or tracking expenses by vehicle. But Simon argues that the companies that sell these cards were founded decades ago with very little innovation since then.
“Most also require a driver to refuel at certain gas stations and do not allow the operator to customize spending controls or view transactions in real time,” he told Ploonge.
Coast’s goal is to use technology to provide fleet business owners and their employees with intuitive, easy-to-use payment products.
“Fleets like these have data needs that corporate cards don’t provide,” Simon said. “They need detailed line-item-level visibility into their employee spend. And they need employee and vehicle payments integrated into the rest of their operations.”
For example, he added, they might want to know how many gallons of which type of fuel are being purchased for which vehicle, or they might want to make sure their employees are spending in line with company policies when those workers are out in the field.
In conjunction with the funding announcement, Coast also revealed that it has teamed up with Visa to launch a Visa Fleet card program so Coast Visa Fleet cardholders can make payments at North American merchants wherever Visa is accepted. .
This new collaboration, according to Simon, allows drivers to use the card to buy fuel virtually anywhere it is sold. It also allows managers to let drivers pay other business expenses such as parking or maintenance and manage them all through a single platform.
Coast’s interchangeable cards, which allow drivers and vehicles to share physical cards while still providing “fine visibility and control”, are designed to simplify the administration process of running a fleet expense program. In addition, SMS-based mobile login and company data collection aim to improve safety, convenience for drivers and data quality for managers, Simon said.
Simon previously co-founded consumer finance startup Bread, which sold to Alliance Data Systems for over $500 million in 2020. He wants to bring “the same kind of ease-of-use and transparency that Bread brought to e-commerce consumers and retailers to a category of businesses and employees that is often overlooked in technology.”
As for its business model, Coast wins merchant interchange fees when their customers use the Coast card to make purchases. It also charges customers a flat subscription fee of $2 per month per employee who uses the cards to make payments that month. It also offers a 2 cents discount to customers for every gallon they buy.
Coast currently has around 20 employees, up from three last year, and wants to grow its staff to around 60 by the end of the year. It also plans to use the funding to expand the platform’s capabilities and offer a wider range of financial products to fleet operators. In particular, it wants to expand its product line beyond fuel payments and into other categories of business expenses that field workers must incur on behalf of businesses, such as parking, maintenance, and other expenses in transit.
Coast is focused on expanding its existing presence with companies in the United States that operate fleets of vehicles in a wide range of industries, including trucks; home service trades such as electrical, plumbing, pest control, and HVAC; and transportation, delivery and others.
“The company’s goal today is to provide the best possible solution for small and medium businesses, from half a dozen vehicles to a few hundred vehicles, but its software scales to meet the needs of much larger companies. fleets,” Simon said.
Rebecca Liu-Doyle of Insight Partners believes the next wave of spend management will include solutions focused on solving category-specific pain points with “purpose-built” features in workflows and payments.
“Daniel and Coast have all the right ingredients – they are focused on solving fleet operators’ pain with an elegant, user-centric approach,” he added.
Accel partner Amit Kumar notes that fleets are “a disproportionately large segment” of all domestic B2B spend and have not yet been served by modern financial products and services.
“The pedigree and sophistication of Coast fintechs has allowed them to adapt the corporate card innovation we are seeing in other market segments for fleet operators,” he wrote via email.
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