Coast, a startup that describes itself as “a financial services platform for the future of transportation,” has raised $40 million in Series B funding, just four months after announcing $25 million a venture capital round and $67 million in debt financing, the startup told TechCrunch exclusively.
Back-to-back fundraising rounds were common before and during the wild investing days of 2021, but they’ve become much rarer since the VC market slowed in 2022. That’s why Coast’s latest round is notable.
Based in New York Side Coast compares itself to companies like Ramp and Brex in that it developed expense management software for fleet operators and their employees. To that end, and like the aforementioned expense management companies, Coast created a business credit card designed for companies that operate fleets of vehicles — and that niche specialization has served the company well. While Coast declined to disclose specific revenue numbers, CEO and founder Daniel Simon told TechCrunch that the startup has grown about “10x” in annualized revenue and payment volume over the past 18 months. (We’ll just offer the obvious caveat that a rapid growth rate could indicate a small initial base.)
Coast counts “thousands of companies” among its customers that operate fleets in service industries such as heating, ventilation and air conditioning, plumbing, landscaping and pest control, construction, government fleets and long-haul trucking. Some of them have just a handful of fleet cards, others have more than 1,000, according to the company. To date, it has issued more than 100,000 cards.
ICONIQ Growth led Coast’s Series B round, which also included existing backers Accel, Insight Partners, Vesey Ventures and Avid Ventures, as well as new investor Thomvest. Synchrony also provided a separate “strategic investment” of an undisclosed amount in the company — a move that Coast said is part of the financial services giant’s partnerships with leading national tire and auto parts retailers such as Discount Tire and Pep Boys.
With the raise, the company says it has now secured nearly $100 million in equity capital since its founding in late 2020. Simon declined to disclose Coast’s latest valuation. ICONIQ Growth general partner Yoonkee Sull has joined the fintech startup’s board as part of the new funding.
“Given our ambitious growth targets and an uncertain financial market environment, it made sense to provide the company with additional capital,” Simon said.
In terms of growth, Simon told TechCrunch that Coast continues to grow among small and medium-sized businesses.
“We also accelerated adoption of our spend management product for non-fuel use cases,” he said. “In these new cohorts, non-fuel usage increased by more than 30% of spend and has seen consistent growth.”
The company makes money by collecting interchange fees from the merchant when its customers use the Coast card to make purchases. It also charges its customers a flat subscription fee of $4 per month for each card actively used to make payments that month.
Coast this month launched a mobile app that Simon said makes it easier for customers to track receipts, associate them with job codes and verify transactions. The company plans to use its new capital to expand its products and partnerships, including offering accounts payable automation and bill payment services.
Coast has about 65 employees, up from about 50 a year ago, and plans to increase its workforce to about 85 by the end of the year.
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