Now that the world appears to have settled longer-term into working in a significantly more distributed way in the wake of COVID-19, companies are getting more serious about using tools to manage how their teams operate within those new parameters. Today, a startup that’s addressing that challenge and how it relates specifically to expenses is announcing some funding.
Mesh Payments, which provides a platform for companies to oversee and manage employees’ expenses, and for employees themselves to better track and manage how and where they spend money, has raised $50 million. It plans to use the funding to continue expanding the functionality of its platform, as well as for further business development. It’s been on a growth boom in the last nine months, growing tenfold in that period, it said.
The round, a Series B, is being led by the very prolific Tiger Global, with participation also from Entrée Capital and Falcon Edge Capital, as well as past backers TLV Partners and Meron Capital. Mesh Payments — founded in Israel and now headquartered in New York — had previously raised $13 million, and it is not disclosing valuation.
Currently the company’s tools cover areas like travel expenses, spend cards and other forms of spend management, but potentially the more interesting aspect of how Mesh works lies in its name.
Mesh Payments’ platform integrates with various other pieces of software and apps that a company might use to run its business, and continually scans that network to determine whether a particular purchase is a useful one, or one that might be overlapping with something that already exists, not to mention not in line with other parts of a company’s specific expenditure policy.
“We start with the notion that there is different context to different kinds of spend,” Oded Zehavi, co-founder and CEO of Mesh Payments, said in an interview. “The process for a trip versus software differs, so we started building models for these unique cases.”
Today, the platform integrates with the likes of QuickBooks, Slack, NetSuite, Xero, G Suite from Google and more. “We are adding more connectors to connect data from organizations’ services on the cloud to be exposed to more company behavior,” he said. “The combination of that data and the intelligence that we designed in a more superior way is what sets us apart.”
So, for example, if an employee suddenly decides to set up an iCloud storage subscription, Mesh would scan the network to determine if that fits with corporate policy, and would also set out to see if the organization already has an account with another cloud storage company. If either of those questions raises a flag, the purchase is flagged, too.
Employees get notifications of these, as do spend managers on the finance team. It’s up to the finance team to decide how strict they would like the policy to be: whether purchases are blocked, or rejected in the aftermath, or issued with a warning/alert.
Understandably, the system requires some substantial onramping from customers: they have to already be working in a digital enough way in order for Mesh’s modelling to work to its best ability. So unsurprisingly, the current customer list is heavy with technology companies, which are already working in the cloud and thus representing an easy port to working with Mesh: Monday.com, Hippo Insurance, Sezzle, Riskified and Snyk are on the list.
As recent rounds for Pleo (which raised at a $4.7 billion valuation just last week) and Soldo (which raised $180 million in July) show, there is currently a huge appetite in the market for better and more updated tools for managing expenses, both at a time when employees may be needing to spend more independently than before because of how they’re working, but also because companies are simply looking to get smarter and come to grips with the systems and financial management they have in place.
Mesh’s focus on larger businesses gives it a very wide funnel, targeting an area that has been particularly rife with legacy tools from companies like SAP (although to be fair they are all focusing on improving user experience and tapping into modern technology more).
Nevertheless, it’s a massive opportunity that is likely to stay, just like at least some of our newly distributed working practices.
“Mesh Payments is an example of a true disruptor — a company who’s innovations are transforming an already-established industry,” said John Curtius, a partner at Tiger Global who led this investment, in a statement. “We’re proud to support a business that continues to deliver on its ambitions, and we look forward to helping Mesh modernize the payments space even further.”