In 2016, Andrew Hoag, previously a senior supervisor at Verisign and an online undertaking lead at NASA’s Ames Analysis Heart, based Teampay, a platform that makes an attempt to automate the software program buying course of for corporations. Hoag’s perception was that the way in which companies spend cash is altering, notably as they embraced digital transformation, and that visibility into — and management over — spend was changing into more and more essential with the economic system’s ups and downs.
Plainly his thesis was right. At the moment, Teampay has a whole lot of shoppers and vital enterprise capital financing behind it. This morning marked the shut of the corporate’s $47 million ($35.25 million in fairness, $11.75 million in debt) Sequence B led by Fin Enterprise Capital with participation from Mastercard, Proof Ventures, Trestle and Espresso Capital, bringing Teampay’s whole raised to $65 million.
Hoag says that the brand new money will likely be put towards increasing Teampay’s partnership with Mastercard and rising its gross sales and advertising operations. Final yr, Teampay launched a Mastercard-branded company card, Catalyst, with spend administration options, signaling the startup’s intentions to enterprise additional into the heated corporate card space.
“At the moment, corporations care greater than ever about the place each greenback goes, which requires a brand new perspective,” Hoag advised TechCrunch in an e mail interview. “In as we speak’s financial setting, Teampay’s software-led strategy has confirmed resilient — as we noticed in late 2020 to 2021, when the economic system rebounds, Teampay advantages disproportionately by accelerated progress … We elevated our debt facility for extra flexibility in unsure occasions.”
Teampay’s platform supplies workflows for workers to submit and approve spending. Utilizing it, managers can implement insurance policies that mechanically accumulate approvals or deny bills that fall into sure classes. Teampay integrates with current chat instruments and delivers real-time reporting, automating bill processing and providing digital playing cards that may be restricted by vendor and quantity.
Hoag notes that Teampay is low-code and doesn’t require customized improvement. “Enterprises crave management and visibility over the funds, and this not solely helps the IT division, however [also] allows all departments to make higher aligned enterprise choices,” he added.
For the previous a number of years, enterprise capitalists have poured cash into the company spend administration house, lured by the promise of low-hanging fruit.
Simply in January, European startup Moss, which provides company bank cards for small- and medium-sized corporations, raised $86 million. Spendesk landed $118 million in July 2021 for its company spend administration service. And in April, Ramp, which provides each company playing cards and spend-tracking software program, secured $550 million in debt and $200 in fairness at an $8.1 billion valuation.
According to Dealroom, over $2.8 billion was invested into company spend administration corporations in 2021. This yr, $1.6 billion was invested between January and Could alone.
Is Teampay sufficiently differentiated? Hoag believes it’s, pointing to the Mastercard partnership. Teampay will collaborate with Mastercard “deeper” going ahead, Hoag says, to “mutually discover alternatives” that “improve product capabilities at scale.”
“Some groups are nonetheless caught with a legacy, reactive mindset anchored on how companies dealt with spending when buying was centralized,” Hoag mentioned. “With schooling and innovation, we look ahead to bringing best-in-class ‘consumerized’ instruments to the finance division.”
The Mastercard plans may be a bit imprecise, and Hoag was detest to disclose even a ballpark estimate of Teampay’s financials, together with annual recurring income. However the whole addressable market is definitely massive sufficient to maintain a couple of vendor — Grand View Analysis estimated its dimension at $15.9 billion in 2021.
In a wise analysis of the sector on Dealroom, Lorenzo Chiavarini writes that horizontal differentiation — for instance, increasing to adjoining companies like fee processing and concentrating on underserved segments — will play a key function in profitable company expense administration. A few of this kind of factor is already on Teampay’s roadmap, like rising the corporate’s accounts payable resolution and increasing cross-border funds performance. The problem, although, will likely be sustaining momentum within the face of stiff competitors like Brex, Invoice.com-owned Divvy, Airbase and incumbents reminiscent of Concur and Expensify.
FinVC companion Peter Ackerson added in a press release by way of e mail: “We noticed Teampay’s exceptional traction and are excited to have led this Sequence B spherical. Spend administration stays an antiquated house, and we imagine Teampay’s platform is ideally positioned given the long-term, strategic significance of spend administration to the workplace of the CFO.”
Teampay, which relies in New York, has over 100 workers at present. The objective is to develop that quantity by 5% to 10% by the top of the yr, Hoag says, barring unexpected market turbulence.