Business expense management platforms is the umbrella term that includes all software, apps, and cards used to automate expense reimbursement and payout activities. The platforms offer ease and control by automating the spend and payout management of enterprises with adequate internal checks and balances. Technologies work together to enhance the value of these platforms. For example, using optical character recognition (OCR) to automate billing and reimbursements, making payments through the platform, and integrating with third-party apps enable platforms to deliver better insights to help cost controls.
Businesses are going global, and opportunities for remote work have mushroomed as “work from anywhere” becomes a fast-growing norm. But managing cross-border employee expenses, procurement, and supply chain dynamics has become more complex. In a natural evolution, expense management is now a necessity for enterprises, as poor expense management and internal controls have become a gateway for employee theft and a leading cause of small businesses failing.
Covid-19’s impact on the sector was largely favorable, with businesses needing expense management solutions either to curtail spending in response to lower revenue or manage the costs of rapid expansions.
However, remote operations and fewer social engagements (like business lunches) also implied lower travel and entertainment expenses - leading to declines in these segments.
Industry expansion was evidenced by several players seeing strong growth in the demand for their platforms:
Payments processed by Melio surged around 5,000% in the 18 months leading to September 2021.
Teampay reported that its annual recurring revenue (ARR) rose around 320% from September 2019 to October 2020.
Expensya's business reportedly grew around 100% during the pandemic.
Plate IQ expanded its customer base by about two-thirds during March 2020–November 2021.
Companies have also chosen to expand their payment offerings in response to higher demand from the pandemic. For instance, 2020 saw the launch of “Tribal Pay” and "TripActions Liquid."
Many startups and incumbents in the space have chosen to operate across several segments, including leading disruptors TripActions, Expensify, Ramp, and Pleo. Business payout management platforms represent the most commonly targeted segment, with the highest incumbent and disruptor presence. The segment is relatively mature, comprising many growth stage disruptors like Coupa Software, Branch, and Melio as well as leading incumbents such as Stripe, SAP, and PayPal.
Business expense cards and non-card expense management platforms both represent less mature segments, with fewer disruptors (many of which are yet to reach the growth stage). Incumbent presence is also lower in each of the segments; however, in recent times established players have shown interest in entering the space through acquisitions. For instance, Bill.com acquired business expense card platform Divvy in May 2021, while Certify acquired 4 card and non-card expense management platforms in 2018–19 (Chrome River, Captio, Abacus Labs, and Emburse).
The business expense management market is led by disruptors catering to several segments, including listed companies like Coupa Software (valued at USD 4.8 billion as of August 2022) and Expensify (valued at USD 1.7 billion as of August 2022). The space also comprises several diversified private companies who have raised over USD 1 billion in funding, including Brex (valued at USD 12.3 billion as of October 2021), Ramp (valued at USD 8.1 billion as of March 2022), and TripActions (valued at USD 7.25 billion as of October 2021).
Melio remains the highest funded pure-play company (as of August 2022), and caters to the business payout management platforms segment. In terms of pure-play companies, Melio is followed by business expense cards provider Jeeves (when ranked by funding). Notably, non-card expense management platforms had the lowest funded pure-play companies (such as Rydoo and Findity - each of which had raised less than USD 10 million as of August 2022); this is partly because many players in the segment also offer a payout management platform or issue business expense cards.
Expensify offers an app that provides a diverse range of expense and payment solutions and insights for individuals and enterprises. It offers business expense cards and reimbursement platforms with automated receipt scanning and approval workflows. Expensify also provides bill payment solutions with automated tracking, approval, and payment.
Its corporate cards also offer benefits to users in the form of discounts when using several B2B platforms such as Stripe, AWS, Quickbooks, and Stack Overflow. Expensify can also be integrated with several third-party HR, tax, accounting, and travel platforms software.
The company follows a freemium pricing model. For business expense cards, users are charged a monthly fee per card. Non-card reimbursement and business payout management platforms are subscription-based.
Key customers and partnerships
As of October 2021, the platform had over 10 million end users, across several enterprises including La Trobe University, Swatch Group, Pinterest, and Atlassian.
Funding and financials
The company’s revenue amounted to USD 142.8 million in 2021; however, it reported an operating loss of USD 10.3 million.
Expensify raised USD 100 million through a credit facility from CIBC Innovation banking in October 2021 to invest in business growth and product expansions. The company was subsequently listed on the Nasdaq in November 2021, where it raised around USD 70 million at a USD 2.2 billion valuation.
Business expense cards:
Non-card expense management platforms:
Business payout management platforms:
Business expense management platforms/cards have a close relationship with payments and enterprise application software. Accordingly, industry incumbents include several payment giants such as Stripe, PayPal, and American Express, as well as enterprise application software providers such as Zoho, SAP, and QuickBooks. Incumbents typically either develop expense management solutions in-house or acquire companies to expand into the space. However, several companies such as Stripe, PayPal, and American Express have also chosen to invest in industry disruptors, while QuickBooks chose to partner with Melio to offer a business payout solution.
Most incumbents operate in the business payout management platforms segment (e.g., PayPal, Global Payments, and FIS). However, some incumbents have chosen to operate across several segments. The business expense card segment has the lowest incumbent presence, with only Stripe, Revolut, and Certify offering in-house solutions. Bill.com entered the segment in May 2021 by acquiring Divvy for USD 2.5 billion.
No investor data is available