In recent years, companies like Brex, Ramp, Divvy and others have emerged as next-gen corporate card solutions for business expense management, competing with commercial incumbents like Amex and Capital One. While those businesses have grown to large valuations and strong initial success, they have been unable to penetrate fleet operators — anyone operating a business that relies on a fleet of commercial vehicles such as trucking businesses, but also plumbing, HVAC, landscaping, and the like. Not for lack of importance, as this sub-vertical comprises roughly 10% of overall domestic B2B card spend, but because it demands vertical-specific controls, security, and visibility to prevent fraud and unauthorized use beyond a narrow set of field use cases.
Historically, open-loop networks like Visa and Mastercard haven’t been able to offer the robust line-item visibility and features required to provide this functionality. As such, incumbents such as Fleetcor and Wex have dominated this sub-vertical by building their own proprietary closed-loop card networks which they’ve integrated into hundreds of thousands of gas pumps around the country. However, with the emergence of modern issuing platforms such as Stripe, Marqeta, Lithic, etc., and with more data being made available at the point of sale, this distinction is eroding as it is now technically feasible for this functionality to be built on top of the open-loop networks.
In partnership with Visa, and harnessing these new transaction primitives, Coast has produced a transformative, modern card issuing expense solution for fleets. It’s early, but the response from design partners and pilot customers has been resounding. What’s most encouraging is the breadth of these pilot customers — for example, a 200-vehicle limo company in upstate New York, a 30-truck regional logistics business in California, and a 20-vehicle plumbing business in the Bronx. Of course, being in the flow of those transactions means that we are innovating on technology, but not on business model.
Daniel Simon is the founder and CEO of Coast. Importantly, he is the former co-founder, COO, and CTO of Bread, a well-regarded payments company where he cut his teeth building fintech infrastructure from the ground up. His off-the-charts fintech fluency is one of the primary reasons for this investment. Building fintech infrastructure isn’t for the faint of heart; it requires a very particular attention to detail and domain expertise. He has both. Alongside Daniel is a talented technical team including a number of former colleagues who’ve worked with Daniel before, which is something I always pay attention to when it happens.
Today, I’m thrilled to announce that Accel is leading Coast’s $27.5 million Series A financing where I’ll be joining the board of directors. Investing alongside us is Rebecca Liu-Doyle of Insight Partners, and existing investor Sheel Mohnot of BTV. We are also co-investing alongside a number of respected fintech-focused angel investors including Itai Damti, CEO of Unit, Johnny Ayers, CEO of Socure, and a host of founders and executives from companies like Divvy, Plaid, Stripe, Flexport, Affirm, Alloy, and others. Daniel has more to say about the round here. Coast represents the latest fintech investment by Accel following companies like Unit, Socure, Galileo, Higo, and Braintree. And in Coast, we see the same potential to unlock a step function of business innovation and entrepreneurship by improving the financial rails upon which they sit.