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Codat raises $40M from Tiger for its SMB-focused API service

by Alex Wilhelm

This morning Codat, a startup that provides APIs to link small-business fintech data to external services, announced that it has closed a $40 million round led by Tiger Global. The company raised $10 million in a Series A around a year ago that Index led; Codat also raised some strategic capital in the interim, but declined in an interview to provide more detail.

The company also declined to provide any guidance regarding how much its valuation changed in the last year between lettered rounds.

That Codat managed to raise more money is not a surprise, as the startup told TechCrunch that it grew its annual recurring revenue (ARR) by 3x from the end of 2019 to the end of 2020. The company’s CEO Pete Lord disclosed that the company is on track to repeat the feat this year. Such growth would imply a 9x gain in revenue at the end of 2021 compared to the result from two years ago.

Things are going well at Codat, in other words.

The startup’s API connects corporate data from internal SMB systems — QuickBooks, iZettle etc. — to external providers. The use cases for the service are easy to understand. If a small business wants to apply for a loan, the ability to provide a potential lender with its financial data in a quick, digital fashion would be useful. Codat would happily facilitate that data linkage.

The startup sells to financial service players, unsurprisingly, and vertical SaaS companies; serving the vertical SaaS (Read more...)

Codat raises $40M from Tiger for its SMB-focused API service

by Alex Wilhelm

This morning Codat, a startup that provides APIs to link small-business fintech data to external services, announced that it has closed a $40 million round led by Tiger Global. The company raised $10 million in a Series A around a year ago that Index led; Codat also raised some strategic capital in the interim, but declined in an interview to provide more detail.

The company also declined to provide any guidance regarding how much its valuation changed in the last year between lettered rounds.

That Codat managed to raise more money is not a surprise, as the startup told TechCrunch that it grew its annual recurring revenue (ARR) by 3x from the end of 2019 to the end of 2020. The company’s CEO Pete Lord disclosed that the company is on track to repeat the feat this year. Such growth would imply a 9x gain in revenue at the end of 2021 compared to the result from two years ago.

Things are going well at Codat, in other words.

The startup’s API connects corporate data from internal SMB systems — QuickBooks, iZettle etc. — to external providers. The use cases for the service are easy to understand. If a small business wants to apply for a loan, the ability to provide a potential lender with its financial data in a quick, digital fashion would be useful. Codat would happily facilitate that data linkage.

The startup sells to financial service players, unsurprisingly, and vertical SaaS companies; serving the vertical SaaS (Read more...)

Vendr raises huge $60M Series A as its SaaS-purchasing service scales

by Alex Wilhelm

This morning Vendr announced a $60 million Series A round, a huge funding event led by Tiger Global, with participation from Y Combinator, Sound Ventures, Craft Ventures, F-Prime Capital, and Garage Capital.

The outsized Series A comes after Vendr last raised $4 million in a mid-2020 seed round, with TechCrunch reporting that the company was profitable at the time. Vendr had raised just over $6 million total before this latest round.

TechCrunch had a few questions. First, how the company had managed to attract so much capital so quickly. According to an interview with Vendr CEO Ryan Neu, his startup grew just under 5x in 2020, and was cash flow-positive last year as well. The startup’s model of standing between SaaS buyers and sellers, speeding up transactions while lowering their cost, appears to have fit well into 2020’s twin trends of rising software reliance and a focus on cost-control.

Second, how did the company manage to grow so much? Vendr charges its customers between 1% and 5% of their software spend that it manages, which can add up. Neu told TechCrunch that a somewhat standard 500 person company might spend $2 million to $3.5 million on software each year, which by our math would make that company worth no less than $20,000 to $35,000 in revenue for Vendr at 1% of spend. At Vendr’s midpoint 2.5%, those figures rise $50,000 to $87,500.

At those prices, Vendr can stack up annual revenue pretty quickly. But why would Vendr customers (Read more...)