Expense management has long been a pain point for employees and accounting departments: for many, tracking and parsing how money is spent on behalf of a company is just too bogged down in legacy software ill-equipped to handle more modern demands. Today, a U.K. startup building solutions to bring the process into the 21st century is announcing a major round of funding to double down on its growth.
Soldo, which provides a platform to issue employees with prepaid company cards that are linked through to an automated expense management system, has closed $180 million in funding. Soldo currently has some 26,000 customers, ranging from small- to medium-sized businesses, through to midmarket enterprises and up to large multinationals across 30 countries, with Mercedes Benz, GetYourGuide, Gymshark, Bauli, and Brooks Running among some of the more popular of them. Alongside that, by way of APIs, it also integrates with the popular accounting packages used by organizations today — NetSuite, QuickBooks, Zucchetti and Xero, along with options to connect Soldo to more than 50 expense management platforms including Concur and Expensify.
The round, a Series C, is being led by Singapore’s Temasek, with Sunley House Capital, Advent International’s crossover fund, Citi Ventures, and previous backers Accel, Battery Ventures and Dawn Capital, also participating. Silicon Valley Bank also provided debt financing of an undisclosed amount.
London-based Soldo also did not disclose its valuation in a statement on this latest investment, but as a point of reference, when it started to raise this money back in December, the company was valued at around $278 million, according to PitchBook data. In the event, Soldo said the round was oversubscribed on the back of strong growth for the company: spend volume on its platform has grown fourfold since its series B, a $61 million round in 2019. (Note: Soldo’s main operations are in London, but it also has a small corporate HQ is in Dublin, as it picked up an e-money license in Ireland in 2019, part of its Brexit hedging.)
More generally — and perhaps because many of us are spending more time away from the head office, or perhaps because some of us are finally getting out on the road again to meet people — expense management is getting a lot of attention at the moment. Just earlier this month, one of Soldo’s bigger competitors, Denmark’s Pleo, raised $150 million at a $1.7 billion valuation.
It is a massive market to play for: Europe’s addressable market for expense management runs at $170 billion, the company said.
The crux of the challenge that Soldo aims to fix is that expenses is usually a very fragmented, non-digitised business, and employees that rack up expenses are usually not accountants: that is to say, handling them correctly is not one of their core competencies. The expenses themselves, meanwhile, have evolved to cover a lot of different things, a byproduct of everything becoming easier to buy online and also how we work today: They might include subscriptions, travel and entertainment, office supplies for your home office, and making purchases on behalf of your company for marketing campaigns or online advertising, and more.
When expenses are happening digitally, they are easier to track, but very often they are for services or goods being purchased IRL, and that is when the other issues arise: People often forget to get receipts, or lose them before they fill out their reports, or pay for things out of their own pocket, and more.
On top of that, expenses are made on corporate cards, or by way of bank transfers. The former can be expensive and hard to control, while the latter has its own challenges: It’s a slow process and often requires multiple people to clear a payment.
Soldo’s approach to fixing this is to first of all make it easier to issue employees with cards, prepaid in order to control spend on them better. It then links the card to an app, which creates automatic prompts that pop up for you every time you make a purchase with a card, to be reminded to capture a receipt and upload it.
“Soldo’s vision is manage the total spend across the breadth of a company, whether that be advertising, software subscriptions, travel and entertainment, vendor management or salaries across all payment methods. When we look at this way, expense management is only one of the many possible use cases and cards are only one of the many ways that a company might transfer money to suppliers,” Carlo Gualandri, CEO and founder of Soldo, told TechCrunch in an email. In contrast to competitors like Pleo, he noted “that we have a broader and more complete focus on managing all the possible needs of a company, way beyond travel and expenses. This is important because the value for the customer of using a spend management platform increases as a more significant share of company spend gets moved onto it.”
Without a doubt, the company’s growth since being founded five years ago hit a big speed bump in the form of COVID-19. Its recovery from that is a testament to how it’s found a place even in the current market.
“The pandemic did almost completely wipe out travel and expenses as a use case of companies’ spend — given limited numbers of workers were travelling, or expensing lunches, for example, in lockdown,” said Gualandri. “It was quite shocking to see all of Europe switch off, country by country, in the first weeks of March of last year as the lockdown kept people in their homes. And with that, a significant part of our financial services revenues also disappeared because business travel is the most common and widespread use of corporate cards.” But then, two things happened, he continued:
“The number of other company spend use cases grew significantly. We saw the global shift to e-commerce and the digitalisation of the finance department. From supporting workers at home to other business activities there was a definite move toward online procurement and that requires a card for the payment,” he said. “Also, many companies started distributing their products or services online and with that they shifted a large share of their spend toward online marketing, an example of a key spend which is normally paid for using cards. So, there was definitely a case of certain spend categories going down and others going up and rapidly so. A number of pandemic-related problems emerged that we realised we could solve.”
“Our experience in software and payments technology gives us deep insight and we are confident Soldo stands at the forefront of finance digitalisation,” said Simon Lambert, a director at Sunley House, Advent International’s crossover fund, said in a statement. “The company operates in a large and fast-growing market, and we are thrilled to partner with its outstanding management team as they seek to build Europe’s leading pay and spend automation platform.”