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Business Expense Management
Overview
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.
Industry Updates
Market Sizing
The US Business Expense Management market could reach USD 3.2 billion–4.1 billion by 2027
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Market Mapping
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 expansion-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 expansion 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 four card and non-card expense management platforms in 2018–19 (Chrome River, Captio, Abacus Labs, and Emburse).
Business expense cards
Non-card expense management platforms
Business payout management platforms
The Disruptors
Market led by highly funded disruptors operating across several segments
The business expense management market is led by disruptors catering to several segments, including listed companies like Expensify (valued at USD 1.7 billion as of August 2022). The space also comprises several diversified private companies that have raised over USD 1 billion in funding, including Brex (valued at USD 12.3 billion as of October 2021), Ramp (valued at USD 5.8 billion as of August 2023), Navan (valued at USD 9.2 billion as of October 2022), and Coupa Software (valued at USD 8 billion as of February 2023).
AvidXchange remains the highest-funded pure-play company (as of November 2023) and caters to the business payout management platforms segment. In terms of pure-play companies, AvidXchange is followed by business payout management platform provider Branch (when ranked by funding). Notably, non-card expense management platforms had the lowest-funded pure-play companies (such as N2F, Rydoo, and Findity, each of which had raised less than USD 30 million as of November 2023); this is partly because many players in the segment also offer a payout management platform or issue business expense cards.
Funding History
Competitive Analysis
Incumbents
In-house development and M&A are the most common avenues for market entry
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.
Notable Investors
