Management of expenses can be time-consuming, tedious, and often repetitive, no matter if you're an accountant or employee of an organization. Pleo, a startup, has announced a large round of growth funding. This follows strong traction.The $150 million raised by the Copenhagen-based startup will go towards further development and business development. Pleo is valued at $1.7 billion. This round sets a new record as the largest Series C by a Danish startup.Pleo is used by approximately 17,000 small and medium-sized businesses. Companies at the middle end have around 1,000 employees. Pleo is now expanding into larger customers, with Pleo employing up to 5,000 people, CEO Jeppe Rindom stated. This ambitious goal would make Pleo a profitable startup considering Europe's $80 billion expense management market (with even greater global potential).The funds will be used to grow its business. Pleo currently employs around 330 people in London, Stockholm and Berlin, as well as in Copenhagen. Pleo will use some of the investment to expand that team and increase its reach.Bain Capital Ventures and Thrive Capital led this round, a Series B. In 2019, Stripes was the lead for startups' Series B. This round appears to have been oversubscribed. The original goal was $100 million.As with other business processes, the management of expenses and controlling company spending have come a long ways over the past few years.No longer are expenses handled by manually entering receipts on paper into a system to get reimbursed. Expense management software can link up with company cards and tap into automation tools to reduce the number of steps. It also integrates with an organization's internal accounting policies to make the process a bit more painless. There are many companies operating in this market, including established players such as SAPs Concur and startups like Expensify that are on the verge of going public.There is much more to be done. Pleos CEO Rindom and CTO Niccolo Perra co-founded the company. The pair had years of experience in fintech and were both early employees of Tradeshift, a B2B supply chain startup. They saw firsthand how small and medium businesses were treated when it came time to manage their expenses.Pleos' approach was to create a system that allows smaller businesses to integrate all stages of employee spending.Pleo is a platform that allows you to use your phone to take pictures of receipts. Pleo's platform goes a few steps further than that.Employers and users can connect their bank details to make it easier for them to be reimbursed for items they pay out of pocket, or vice versa for paying for things that should not have been charged to the card. Pleo can also be used to create invoices that need to be paid later than the date of purchase. This is a much better option than having to contact an accounts payable department separately to settle these. The company can also set spending limits for individual users by purchasing higher priced tiers beyond the basic service that allows up to five users. Pricing is determined by the number of users per month.Pleo has also integrated fraud protection services to the platform in order to detect instances where a card number may have been compromised or is being used for other than work purposes.It is notable that the startup built all of its tech, including the payments feature from scratch. This allows them to have complete control over the features and to be able add more to the site as they need.Rindom stated in an interview that we started with a partner to provide services such as payments. However, it wasn't fast enough for us to grow quickly. We decided to do everything in-house.This opens up a lot of possibilities as to how Pleo could evolve over the next few years, now that it is focused on hyper-growth. Rindom said that no matter what the next steps may be, they will continue to work on solving the expense problem.He said that we only use our infrastructure for personal purposes. Although we have many other ideas, we don't plan to sell [payments] as a service. In fact, the ability pay invoices was only launched in April this year. We are constantly coming up with new ideas, but we will only launch those that are relevant to customers.Investors have been drawn to Copenhagen by this focus, as well as the execution and customer traction.In a statement, Keri Gohman (a partner at Bain Capital Ventures) stated that the future of work gives employees the tools they need for success. Pleo recognizes the importance of modern companies moving towards employee centricity. Pleo provides workers with an easy-to-use spending management app that automatically tracks corporate spending and generates expense reports. This is paired with powerful tools for businesses to manage every penny.Bain has been an active investor in European fintech and also supported GoCardless' recent round. BCV invests only in founders who can tackle large problems. Jeppe and Nicco recognized a major challenge faced by employers. They tracked all corporate spending and reconciled expenses back to the general ledger. And they solved it with elegant technology that employees and employers love, said Merritt Hummer, a partner of Bain Capital Ventures.Thrive is another notable backer. It will be interesting to see if Pleo can link up with other VCs, such as Plaid, Gong, and Trade Republic.Pleo has already changed the way over 17,000 companies manage their expenses. It saves them time, lowers costs, and increases transparency, stated Karem Zaki (general partner at Thrive capital). Pleo is a great partner and we are looking forward to helping them drive the next stage of their growth.
