There is still no end in sight for the summer of mega deals for fintech companies. After closing major investment rounds for neobroker Trade Republic and Berlin-based insurtech Wefox, Danish financial startup Pleo has followed suit. The company raised $150 million, as it announced, bringing its valuation to $1.7 billion. It is thus the first Danish fintech unicorn. That’s the term used to describe startups with a valuation of more than $1 billion. The latest funding round was led by two major U.S. venture capitalists, Bain Capital Ventures and Thrive Capital, which have also invested in other large startups such as LinkedIn and Lemonade.
Copenhagen-based fintech company Pleo says it offers a one-stop solution for corporate expenses, primarily to smaller and medium-sized companies with up to 1,000 employees. Specifically, employees receive their own company expense cards, for example, which they can use to pay for purchases for work or even business-related train rides and flights. Employees can also simply photograph receipts with their smartphone and save them in the app – the company advertises no more tedious paperwork.
Invoices are then digitally categorized. Companies can set spending limits for the cards. Spending itself is tracked and stored in an app in real-time. The Pleo app can also be integrated with accounting, so the process of spending should be completely automated.
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The idea is to regain control overspending as an organization, said Pleo co-founder Jeppe Rindom in an interview with F.A.Z. Companies waste a lot of time on expense management. The idea came to him when he was head of finance at another company. There were no individual cards for employees, so they occasionally used Rindom’s card for various expenses. Over time, however, he lost track of who currently had their card or which subscriptions were still running on the company card. The complexity was far too high, said Rindom. He wanted to solve the problem primarily from a payment perspective, rather than from a software perspective, as SAP does.
Pleo is not the only vendor pushing into the lucrative spend management market. The French start-up Spendesk is currently also present in Germany with its own software. There, as with Pleo, all expenses can be collected and tracked in an app. The German provider pliant is also among the competitors.
Companies pay 10 euros a month per employee who uses Pleo. That’s not a lot of money, Rindom says, considering it can save money equivalent to an employee’s monthly salary. Pleo also offers smaller companies with five to 10 employees free use of the platform with fewer features.
The company has ambitious goals
Founded in 2015, the fintech company Pleo now counts around 17,000 companies in Denmark, Sweden, Germany, the UK, Ireland, and Spain among its customers. Every week, a total of 300 new companies are added, says Rindom. The largest market is currently still the United Kingdom – although the company started there earlier – but it is already being followed by Germany. The German market, in particular, seems to be attractive; estimates put the number of small and medium-sized companies in this country at just under 3.5 million.
The money from the financing round is to be used for further growth and, among other things, to finance new hires. Currently, 330 employees work for Pleo – by the end of next year, the number should be 1000. This will probably be necessary if the company is to achieve its extremely ambitious goals: The number of customers is to rise to one million by the end of 2025.
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First published in FAZ.NET, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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