Spend management platform Teampay expands partnership with Mastercard, raises $47M

Spend management platform Teampay expands partnership with Mastercard, raises $47M

In 2016, Andrew Hoag, formerly a senior manager at Verisign and a web project lead at NASA’s Ames Research Center, founded Teampay, a platform that attempts to automate the software purchasing process for companies. Hoag’s insight was that the way businesses spend money is changing, particularly as they embraced digital transformation, and that visibility into — and control over — spend was becoming increasingly important with the economy’s ups and downs.

It seems that his thesis was right. Teampay today boasts hundreds of customers and substantial venture capital funding. This morning marked the close of the company’s $47 million ($35. 25 million in equity, $11. 75 million in debt) Series B led by Fin Venture Capital with participation from Mastercard, Proof Ventures, Trestle and Espresso Capital, bringing Teampay’s total raised to $65 million.

Hoag states that the new money will be used to expand Teampay’s partnership and grow its sales and marketing operations. Teampay’s last year launch of a Mastercard-branded corporate credit card, Catalyst with spend management features signaled the startup’s intent to expand its partnership with Mastercard and expand its sales and marketing operations ..

” Today, companies care more about where every dollar goes than ever, which requires a fresh perspective,” Hoag explained to TechCrunch in an interview. “In today’s economic environment, Teampay’s software-led approach has proven resilient — as we saw in late 2020 to 2021, when the economy rebounds, Teampay benefits disproportionately through accelerated growth … We increased our debt facility for additional flexibility in uncertain times.”

The platform

Teampay allows employees to submit and approve expenditures. Managers can use it to create policies that automatically approve or deny expenses falling under certain categories. Teampay integrates seamlessly with chat tools to provide real-time reporting, automate invoice processing, and offer virtual cards that can be restricted by vendor or amount.

Teampay

Image Credits: Teampay

Hoag points out that Teampay is low-code, and doesn’t need custom development. He said that enterprises want control and visibility over their finances. This not only helps the IT department but also allows all departments to make better business decisions.

Venture capitalists have invested a lot of money in the corporate spend management sector over the past few years, lured by low-hanging fruits.

Just in January, European startup Moss, which offers corporate credit cards for small- and medium-sized companies, raised $86 million. Spendesk landed $118 million in July 2021 for its corporate spend management service. And in April, Ramp, which offers both corporate cards and spend-tracking software, secured $550 million in debt and $200 in equity at an $8.1 billion valuation.

According to Dealroom, over $2.8 billion was invested into corporate spend management companies in 2021. In the year 2000, $1.6 billion was spent between January and May.

Is Teampay sufficiently different? Hoag believes so, pointing out the Mastercard partnership. Hoag states that Teampay will work with Mastercard “deeper” in the future to “mutually examine opportunities” that “enhance product capability at scale .”

“Some departments are still stuck in a legacy, reactive mindset that was anchored on how businesses managed spending when purchasing was centralized.” Hoag stated. “With education, innovation, we look forward bringing best-in class ‘consumerized tools’ to the finance department .”

The Mastercard plans may be a little vague and Hoag was reluctant to give even a rough estimate of Teampay’s financials including annual recurring revenues. But the total addressable market is certainly large enough to sustain more than one vendor — Grand View Research estimated its size at $15.9 billion in 2021.

In a smart analysis of the sector on Dealroom, Lorenzo Chiavarini writes that horizontal differentiation — for example, expanding to adjacent services like payment processing and targeting underserved segments — will play a key role in winning corporate expense management. Some of these things are already on Teampay’s agenda, such as growing the company’s accounts payable system and expanding cross-border payment functionality. The challenge, though, will be maintaining momentum in the face of stiff competition like Brex, Bill.com-owned Divvy, Airbase and incumbents such as Concur and Expensify.

FinVC partner Peter Ackerson also added via email: “We saw Teampay’s remarkable traction, and are excited to be leading this Series B round. We believe Teampay’s platform is well-positioned for the long-term strategic importance of spend management to our office of the CFO .”

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Teampay, which is based in New York, has over 100 employees currently. The goal is to grow that number by 5% to 10% by the end of the year, Hoag says, barring unforeseen market turbulence.

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