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 in venture funding and $67 million in debt funding, the startup told TechCrunch exclusively.
Back-to-back fundraising rounds were common during and before the investment boom of 2021, but have become much rarer since the VC market downturn in 2022, which makes Coast's latest round notable.
New York-based Coast rivals the likes of Ramp and Brex in that it develops expense management software for fleet operators and their employees. To that end, like the aforementioned spend management companies, Coast is developing a commercial charge card designed for companies that operate fleets, and this niche focus has paid off for the company. Coast declined to share specific revenue figures, but CEO and founder Daniel Simon told TechCrunch that the startup has grown about “10x” in both annual revenue and transaction volume over the past 18 months. (Anyway, the obvious caveat is that fast growth rates may come from a small initial base.)
Coast counts “thousands of businesses” who operate vehicles in service industries such as HVAC, plumbing, landscaping, pest control, construction, government vehicles and long-haul trucking as customers, with some having just a few vehicle cards and others having more than 1,000, the company said. To date, it has issued more than 100,000 cards.
Image credit: Coast
ICONIQ Growth led Coast's Series B round, joined by existing backers Accel, Insight Partners, Vesey Ventures and Avid Ventures, as well as new investor Thomvest. Synchrony also made a separate “strategic investment” in the company for an undisclosed amount. Coast said the move comes in line with the financial services giant's partnerships with some of the nation's top tire and auto parts retailers, including Discount Tire and Pep Boys.
The company said the funding brings its total equity to about $100 million since it was founded in late 2020. Simon declined to disclose Coast's latest valuation. ICONIQ Growth general partner Yunki Sall joined the fintech startup's board of directors as part of the new funding.
“Given our ambitious growth targets and the uncertain capital markets environment, it makes sense to inject additional capital into the company,” Simon said.
On the growth front, Simon told TechCrunch that Coast continues to see growth among small and medium-sized businesses.
“We are also accelerating the adoption of our expense management products for non-fuel uses,” he said. “For these new cohorts, non-fuel use has increased to more than 30% of spend and is growing steadily.”
The company makes its profits by collecting fees from merchants when customers use their Coast Cards to make purchases, and it also charges customers a flat monthly subscription fee of $4 for each card actually used for a payment that month.
Coast released a mobile app this month that Simon said makes it easier for customers to track receipts, match them to job codes and verify transactions. The company plans to use its new funding for product and partnership development, including automating accounts payable and offering bill payment services.
Coast has about 65 employees, up from about 50 a year ago, and plans to grow that to about 85 by the end of the year.
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