Fintechs are often on par with banks when it comes to using technology to improve customer experience.
Commercial credit card and expense management provider Torpago is no exception, with one caveat: It builds its technology for banks, specifically community banks.
True, Trupago is often lumped in with companies like Brex, Mercury, and Lampe, all well-known card and spend management platforms that “have done a great job,” according to Trupago founder and CEO Brent Jackson. But they're still competing for the same corporate customers, he adds. Instead, Jackson sees Trupago's competitors as companies like Fiserv and Finastra, which provide software to community banks.
“We started out competing with Brex and Ramp and American Express and Capital One,” Jackson told TechCrunch. “That helped us build a great product, but we realized early on that this wasn't the market we wanted to go after.”
The company launched its Torpago Powered By product in 2023. The product incorporates all of the features the company has built for small businesses, but instead of selling directly, it is designed to help regional and community banks with less than $20 billion in assets launch their own branded cards and spend management programs.
Torpago Powered By tools and infrastructure give bank customers access to sophisticated fintech capabilities without ever leaving the bank's branded domain. Banks get Torpago's fully branded software, integrated with over 200 accounting systems, the ability to issue virtual cards in real time or physical cards, and a dashboard to manage everything related to both products.
For Jackson, the strategy positions Trupago as a partner rather than a competitor to the banks. Although the banks own all the customers and all the card volume, “their credit card tools and technology are the worst,” he said.
“We're actually providing an experience that banks can be proud to promote, and that they can leverage to increase fee revenue, help retain deposits, and improve the customer experience,” Jackson said. “Plus, we have access to a ton of data.”
Torpago says one advantage banks have over their competitors is data sharing: “We hear all the time from banks that work with other providers that it's hard to get reports and get insights into their customers and how they're spending.”
Torpago admin dashboard (Image courtesy of Torpago)Image courtesy of Torpago /
Torpago initially had 2,000 small and medium-sized businesses as customers. Since shifting customers to banks, that number has been reduced to 300 as the company focuses on acquiring bank customers. Torpago currently has partnerships with three banks and plans to partner with six more banks over the next two quarters.
Jackson said the company's new marketplace also helped it secure $10 million in new Series B funding at a valuation of $55 million. The round was co-led by Priority Tech Ventures, a division of Priority Technology Holdings, and EJF Ventures, with participation from BancTech Ventures and other existing investors. With this new investment, the company now has raised about $18 million in equity funding, including $6 million in a Series A in 2023.
Jackson said growth over the past year has also been strong. The company has more than doubled its revenue since raising its Series A. Revenue is generated through interchange fees. The company also tracks total payment volume, which he said has also more than doubled since the Series A.
Torpago has been working behind the scenes over the past year to rebuild its infrastructure to better serve banks' needs, and the Series B will enable the company to bolster its implementation and compliance resources as it expands its product suite.
A lot of that will come in the form of artificial intelligence through large language models aimed at assisting with underwriting, credit memos and risk scores, Jackson said. The company also plans to tap into older products like Concur with an AI travel booking engine to allow cardholders to book corporate travel through Trupago's AI chatbot. The product is expected to launch next quarter, he said.
Meanwhile, Carey Ransom, managing director at BankTech Ventures, which led the Series A round, told TechCrunch that BankTech and EJF are more like strategic investors: Both have banks in their ecosystems and will work with Torpago on introductions.
“We know this isn't a one-winner type of market,” Ransom says. “It's a huge market that needs significant upgrades across the board, and banks have both the need and the opportunity to significantly upgrade their capabilities around commercial cards and expense management. This is where Trupago excels more than any other company with the drive to set themselves apart. Partnering with and through banks is a great way to differentiate their approach.”