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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 a $25 million round, the startup has told TechCrunch exclusively.
Back-to-back fundraises were common prior to and during the wild investment days of 2021, but have been much more rare since the VC market downturn in 2022. That makes Coast’s latest haul notable.
New York-based Coast compares itself to the likes of Ramp and Brex in that it has developed expense management software for fleet operators and their employees. To that end, and like the aforementioned spend management companies, Coast has created a commercial charge card designed for the businesses that operate vehicle fleets — and that niche focus has served the company well. While Coast declined to divulge hard revenue figures, CEO and founder Daniel Simon told TechCrunch that the startup grew about “10x” in both annualized revenue and payment volume in the last 18 months. (We’ll just offer the obvious caveat that a fast rate of growth could indicate a small initial base.)
Coast counts “thousands of businesses” as customers that operate fleets in service industries such as HVAC, plumbing, landscaping and pest control; construction; government fleets; and long-haul trucking — some with just a handful of fleet cards, and others with more than 1,000, the company says. To date, it has issued over 100,000 cards.
Image Credits: Coast
ICONIQ Growth led Coast’s Series B round, which also included participation from existing backers Accel, Insight Partners, Vesey Ventures and Avid Ventures, as well as new investor Thomvest. Synchrony also provided a separate “strategic investment” of an undisclosed amount into the company — a move that Coast says aligns with the financial services giant’s partnerships with top national tire and auto parts retailers such as Discount Tire and Pep Boys.
With this raise, the company says it has now secured nearly $100 million in equity since its late 2020 inception. Simon declined to reveal Coast’s latest valuation. ICONIQ Growth General Partner Yoonkee Sull has joined the fintech startup’s board of directors as part of the new funding.
“With our ambitious growth goals and an uncertain capital markets environment, it made sense to arm the company with additional capital,” Simon said.
In terms of its growth, Simon told TechCrunch that Coast continues to grow among small and mid-sized businesses.
“We’ve also accelerated the adoption of our expense management product for non-fuel use cases,” he said. “In these new cohorts, non-fuel usage has grown to over 30% of spend and has been growing steadily.”
The company makes money by earning interchange fees from the merchant when its customers use the Coast card to make purchases. And it charges customers a flat subscription fee of $4 per month per card that is actively used to make payments that month.
Coast this month released a mobile app that Simon says makes it easier for its customers to track receipts, match them to job codes and verify transactions. It plans to use its new capital toward product and partnership development, including offering accounts payable automation and bill payments services.
Coast has around 65 employees, compared to about 50 a year ago, and plans to grow its staff to about 85 by year’s end.
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