Expense Management startup Cape raises $33.1m to simplify spending control systems & eliminate expense reports
Meet Cape, a new Australian startup that offers an Expense Management platform issuing corporate charge cards, primarily focused on helping their business customers spend smarter and save time as opposed to generating a quick buck from them.
Cape announced a $33.1m raise today, with funding from Aura Ventures, Investible, Scalare Partners, Mercury Capital and 15 business angels, including Stripe’s APAC Head of Startup practice, the founder of legaltech platform LegalVision & a handful of early Atlassian employees.
Expense management is a famously frustrating area of technology with broken processes that see employees continuously having to carry the burden of footing the bill for company purchases made on their personal card, usually because getting it through the corporate provided system is too much hassle.
Many companies have disparate software vendors for expenses and corporate card solutions such as Expensify and American Express.
If they manage to use systems, it will typically see them submitting expense reports at the end of each month, with the invoice attached, then reconciling this in their accounting software. Each step of this process ends up being time-consuming and costly for an organisation and fraught with errors.
Founder Ryan Edwards-Pritchard’s built Cape with the mission to help businesses unlock expense nirvana by saving time on financial administration work and cutting money associated with wasteful spending by creating a smoother system for employees and employers to operate with a single streamlined workflow on a unified platform. Ultimately Cape aims to close the loop between spend and expense management by providing both as an all-in-one spend management platform.
Cape aims to provide a centralized node for internal expense controls, rooting out duplicate and unnecessary expenses to help companies lower their total expenses with corporate cards wrapped in software that helps companies track and control all spending. Businesses are able to set different limits for different individuals and teams, as well as centralizing all of their receipts, attaching them to each expense with integrations into Cloud Accounting Software providers.
Unlike some competitors however, the startup will provide their customers with cashback on all their purchases, whether that be a client coffee, Uber ride or monthly subscription cost, without an over-engineered points or rewards system.
Cape customers get access to a charge card with credit limits up to $100k depending on creditworthiness. Cape leverages the latest in CDR (Open banking) technology to understand their customers financial position and any subsequent changes to ensure they’re offering an appropriate line of credit.
Being one of the first in this geography with their model, Cape is focused on building a powerful software suite around their products, enticing customers in with digital tools built around spend itself, helping companies manage and limit their cash outflows.
Cape, like many of its peers in North America (Brex & Ramp) and Europe (Pleo & Payhawk), makes money by collecting a small slice of customer spend as revenue via interchange income. With $66 billion in B2B spending in Australia alone, there is plenty of market for the startup to grow into.
Unlike these territories, interchange in Australia is one of the lowest globally. Which meant thinking up an entirely different model. This first involved Cape becoming a Principal Member to Mastercard to control their costs by retaining all of the interchange and to offer a route to internationalise their operations across the APAC region. It then saw Cape taking a different approach to their peers, allowing their customers to issue unlimited virtual cards to their employees, with no transaction fees or interest charged on the credit facility. Instead they chose to charge for their expense and spend management software, making it more like a traditional SaaS company with tiered pricing.
Daniel Veytsblit, Investment Director at Investible, says he has seen very little innovation in this space and that's what drew him to the company. “Cape has taken a bold step forward to create an entirely new paradigm. It delivers a tangible solution to the biggest problems finance teams face as their companies grow,” Veysblit said in a statement.
The 18 person team founded 17 months ago is based in Sydney and remotely across 3 continents. They are planning to use the funds to invest in technology with building an expansive suite of products to cover the entirety of corporate spend by doubling their headcount in the coming months, with the vast majority of capital going into hiring Engineers and Product specialists. Recent recruits include its new Sydney based CPMO Andrew Fanner who previously led the Product and Marketing functions for U.K. based Cashplus which boasts 350k SME customers and a new London-based CTO in Julian Guppy, who previously co-founded U.K. ID&V platform Onbord and was the CTO of Business Credit Card platform Capital On Tap, Guppy has been consulting with Cape for some time and was involved with the recent replatform of the startup from Angular to React.
About Cape
Cape is building the APAC’s first finance automation platform that issues virtual corporate cards designed to help companies strengthen their cash flow. Cape provides businesses with full visibility and control on purchasing to cut wasteful spending and the time taken on financial administration work relating to expense management.