It’s usually difficult for new and small businesses to have everything taken care of. From taking care of employees’ needs in human resources to setting up a payroll system, it can be overwhelming to get everything done perfectly. To help ease some of this burden, the London-based tech startup Codat offers a solution that connects the internal systems of small businesses to banks, fintechs and other financial institutions, allowing business data to flow back and forth in real time. The company has announced raising €8.79 million in venture funding.
Next stop, the US
The latest investment of €8.79 million in Codat comes from the international venture firm Index Ventures, which previously backed notable companies such as Adyen, Plaid and Robinhood. The firm’s partner Jan Hammer and venture partner Stephane Kurgan now join the board at Codat. The new funds will be used to expand the company’s services to the US and add 100 more employees by the end of 2020.
Codat was started in 2017 by CEO Peter Lord, COO Alex Cardona and CTO David Hoare. They previously worked together at what is now MarketFinance, a peer-to-peer invoice finance platform.
Speaking exclusively with Silicon Canals on the company’s US expansion plans, Peter Lord says, “Codat will open an office in New York, led by the CEO who is relocating from London to support and grow our clientbase in the US. Codat currently counts a dozen fast-growing fintechs in North America as clients, as well as securing a number of strategic technology partnerships.“
COVID-19 can’t stifle Codat’s growth!
Codat enabled simplified and accelerated loan application processing for COVID-related small business loans at one of the UK banks it works with. The startup reduced the ‘time to cash’ for recipients by weeks and enabled banks to cope with the high influx of loan applications in a week, which is what they would normally receive in a year. Something worth noting is that lenders usually face difficulties while retrieving data of a small business they are working with.
“Publicly available data, such as that on Companies House or tax returns, would often be out of date, and collecting data from the small business would be a long, manual and cumbersome process. Small businesses would therefore lose out with poor access to credit and poor customer experience.” says Lord. “The global pandemic has exposed these shortcomings and brought them to the international stage. Lenders, who became inundated with applications from desperate businesses, quickly understood the need to digitise manual processes. Access to real time accounting data, powered by Codat, allows them to make quick and accurate lending decisions.”
Business post coronavirus
Codat’s clients are some of the leading fintechs, insurance companies and banks, including iZettle, Experian, and two of the top four UK banks. The company has an API that can directly plug into the software being used by small businesses. This enables financial organisations to access a company’s records,, from accounting software to payment terminals, in a dynamic manner.
Peter Lord saya, “In a post COVID world it is more important than ever for financial service providers to have access to accurate data on their small business customers.No two small businesses are the same and each will have been impacted by COVID in different ways. Providers will need real-time visibility of past and present financials in order to both mitigate risk and properly serve their customers.”
Image credits: Codat
Stay tuned to Silicon Canals for more European technology news