The expense management arena is a crowded onewith well-funded players such as Brex, Ramp and Navan clamoring for market share.
These companies generally focus on tech startups and large corporations. But a four-year candidate, Coastis going after a different type of customer — businesses with so-called “real” field staff and fleets to manage such as trucking companies, plumbers, HVAC businesses or last mile delivery companies.
Founded in late 2020 by Daniel Simon, Coast describes itself as “the modern financial services platform for the future of transportation.” It is compared to the likes of Ramp and Brex as it has developed expense management software for fleet operators and their employees. To this end, and like the aforementioned expense management companies, Coast has created a commercial charge card designed for businesses that operate fleets of vehicles, asFocusing on the hat position has served the company well. While Coast declined to disclose hard revenue figures, CEO Simon told TechCrunch that it saw about a 550% increase in annual revenue and payment volume growth in 2023. That growth prompted its existing investors to double down on the company, attracting at the same time a new supporter. Today, Coast announces that it has raised an additional $25 million in venture capital and $67 million in debt financing.
BoxGroup and Avid Ventures led the equity raise, while other existing investors such as Accel, Insight Partners and Better Tomorrow Ventures also participated. Vesey Ventures joined as a new backer. Silicon Valley Bank (as a division of First Citizens Bank) and Triple Point Capital provide the debt capital commitment. Other investors include The Fintech Fund and a long list of founding angel investors including Affirm’s Max Levchin, Plaid’s William Hockey, Unit’s Itai Damti, Flexport’s Ryan Petersen, Marqeta’s Jason Gardner, and Alloy’s Laura Spiekerman and Tommy Nicholas, among others .
Simon declined to disclose Coast’s new valuation, saying only that “the round represents a significant step up from the company’s previous Series A.” In February 2022, Akti raised $27.5 million in the financing of business participations co-head of Accel and Insight Partners. With the latest increase — which Simon is described as “not an extension of Series B or Series A” but more of a round from within — the company has secured a total of over $56 million in equity capital.
Special focus
Historically, fleets have turned to specialized fleet and fuel credit cards that provide controls such as limiting purchases to only certain grade fuel products or tracking spending per vehicle. But Simon argues that the companies selling such cards were founded decades ago with very little innovation since then.
Coast has thousands of customers who operate fleets in service industries such as HVAC, plumbing, landscaping and pest control. construction; government fleets; and long-haul trucks.
“Fleets like these have data needs that normal corporate cards don’t provide,” Simon told TechCrunch. “They need detailed, line-item-level visibility into their employee spending. For example, they want to know how many gallons of which grade of fuel are being purchased for which vehicle.”
For example, in addition to ensuring that expenses comply with company policy, fintech startup has linked its accounting tools to vehicle telematics and fleet management software in an effort to provide real-time data on vehicle condition and location, he said.
And by offering mobile SMS connectivity and data collection, Coast claims it can “improve safety, convenience for drivers and data quality for managers”.
The company makes money by earning merchant interchange fees when its customers use their Coast card to make purchases. And it charges customers a flat fee of $4 per month per card actively used to make payments that month.
It also offers the customer 2 cents off for every gallon purchased, as well as other discounts when customers shop with its partners, which include 7-Eleven/Highway, RaceTrac, Discount Tire and Casey’s.
Doubling
Addie Lerner, founder and CEO of Avid Ventures, told TechCrunch that the latest injection into Coast makes the startup one of her company’s “biggest positions.” He said Avid was impressed by the company’s traction with non-fuel general corporate spend as well as its larger mid-market fleet customers.
“Coast’s product certainly incorporates elements of Ramp and Brex’s sleek modern software and card offerings, but goes even further with fleet-specific features built into the product,” Lerner wrote via email. “Combining payments with software designed specifically for an overlooked industry makes Coast quite exciting.”
He described Coast’s business as one that can be “a very sticky and high-margin business.”
“We’re looking at established multibillion-dollar providers in the space to understand how big (and profitable) these businesses can get,” Lerner added, pointing to companies such as Wex and Fleetcor.
Simon, who previously co-founded consumer finance startup Bread, which was sold to Alliance Data Systems for more than $500 million in 2020, told TechCrunch that the new capital will be used to expand Coast’s capabilities and offer a wider range of financial products to fleet operators.
Coast is also actively hiring. It currently employs approximately 60 workers.
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