Coast, which aims to help companies control fuel and fleet spending with its expense management software, has raised $27.5 million in a Series A financing co-led by Accel and Insight Partners.
The raise comes just seven months after New York-based Coast announced it had raised $6 million in a seed round of funding. Existing backers Avid Ventures, Better Tomorrow Ventures and BoxGroup also participated in the financing, along with new investors Flexport and The Fintech Fund. The company is also backed by a long list of founder angel investors such as 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.
Founded in late 2020 by Daniel Simon, Coast describes itself as the “modern financial services platform for the future of transportation.” It compares itself to the likes of Ramp, Brex or Airbase in that it has developed an expense management software platform 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, such as trucking companies, plumbers, HVAC businesses or last-mile delivery companies.
Historically, fleets have turned to specialized fleet and fuel credit cards that provide controls like restricting purchases to only fuel products of a particular grade or tracking expenses on a per-vehicle basis. But Simon argues that the companies that sell such cards were founded decades ago with very little innovation since.
“Most also require a driver to refuel at certain gas stations and do not allow the operator to customize spending controls or see transactions in real time,” he told TechCrunch.
Coast’s goal is to use technology to provide fleet business owners and their employees payments products that are intuitive and easy to use.
“Fleets like these have data needs that corporate cards don’t provide,” said Simon. “They need detailed visibility at the line-item level into their employees’ spending. And, they need their employee and vehicle payments integrated into the rest of their operations.”
For example, he added, they might want to know how many gallons of which fuel grade are being bought for which vehicle or want to make sure that their employees’ spending complies with company policies when those workers are in the field.
In conjunction with the funding announcement, Coast also revealed it has teamed up with Visa to launch a Visa Fleet card program, so that Coast Visa Fleet cardholders can make payments at North American merchants wherever Visa is accepted.
This new collaboration, according to Simon, allows drivers to use the card to purchase fuel nearly anywhere it is sold. It also allows managers to permit drivers to pay for other business expenses, such as parking or maintenance, and to manage them all through a single platform.
Coast’s interchangeable cards, which allow drivers and vehicles to share physical cards while still providing “fine-grained visibility and control,” are designed to simplify the administration process of running a fleet expenses program. Also, the company’s SMS-based mobile sign-in and data collection is aimed at improving security, convenience for drivers and data quality for managers, Simon said.
Simon previously co-founded consumer finance startup Bread, which sold to Alliance Data Systems for over $500 million in 2020. He wants to bring the “same sort of ease of use and transparency that Bread brought to e-commerce consumers and retailers to a category of business and employee that is often overlooked in tech.”
As for its business model, Coast earns interchange fees from the merchant when its customers use the Coast card to make purchases. It also charges customers a flat subscription fee of $2 per month per employee who use the cards to make payments that month. It also offers a 2¢ rebate for customers for every gallon that they buy.
Presently, Coast has around 20 employees, compared to three a year ago, and wants to grow its team to about 60 by year’s end. It also plans to use the funding toward expanding the platform’s capabilities and offer a wider range of financial products to fleet operators. In particular, it wants to expand its product line beyond payments for fuel and into other categories of commercial spend that field employees need to make on behalf of businesses, such as parking, maintenance and other on-the-road expenses.
Coast is focused on expanding its existing footprint with businesses in the United States that operate vehicle fleets across a broad range of industries, including trucking; home services trades like electrical, plumbing, pest control and HVAC; and transportation, delivery and others.
“The company’s goal today is to provide the best possible solution for small and medium-sized businesses, from as few as half a dozen vehicles all the way up to a couple hundred vehicles, but its software scales to serve the needs of much larger enterprise fleets,” Simon said.
Insight Partners’ Rebecca Liu-Doyle believes the next wave of spend management will include solutions that are focused on solving category-specific pain points with “purpose-built” capabilities across both workflow and payments.
“Daniel and Coast have all the right ingredients — they are focused on solving the pain of fleet operators with an elegant user-centric approach,” she added.
Accel Partner Amit Kumar notes that fleets are “a disproportionately large segment” of all domestic B2B spend and yet have been underserved by modern financial products and services.
“Coast’s fintech pedigree and sophistication have allowed them to adapt the corporate card innovation we’re seeing in other market segments for fleet operators,” he wrote via email.
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