Codat, a UK-based company that has a single API integration for small businesses to plug into and share their business data, has raised $40 million in its Series B funding round that was led by Tiger Global.
Other participants in the round included Index Ventures and Paypal Ventures which are existing investors. Codat helps with the easy sharing of business and financial data so that banks and financial institutions would be able to easily access everything from the accounting software to payment terminals that record real-time transactions. It also plans to add to its data products and accelerate growth and hiring as well.
The company has been growing very strongly in recent months as it had tripled its annual growth and doubled its headcount during this time. It is expected that the company would use these funds to expand its US operations and upgrade its API to include payroll and commerce data.
Peter Lord, CEO of Codat commented: “Financial services for SMBs are now changing more and more quickly, and we’re privileged to work with the people and companies who are driving this change to make life better for small businesses. As Codat is the platform on which more and more of this revolution is built, this investment accelerates the industry transformation.”
The company already has very large clients that include Brex, ClearCo, Zettle from Paypal, and others. The software and the platform help small businesses and financial firms to avoid the use of cumbersome excel sheets and PDFs to read and process data. This helps the companies and the banks to scale up their services pretty quickly and can quicken their product offering to small businesses and this would, in turn, help them to grow their business quickly.
“The number of SMB-focused software products will continue to proliferate, and we expect many of these products to be powered by Codat in the future,” said John Curtius, Partner at Tiger Global. “Codat’s customers consistently told us that Codat’s value proposition is incredibly compelling – a faster and better solution at a fraction of the cost as compared to a do-it-yourself approach.”
Codat has designed its APIs in such a manner that all the different software that any small business would use can be integrated using the single API and that data can then be used by banks and other financial firms for loan applications, accounting, expense management, and others. The number of different software used by small businesses is only going to increase in the future with no consolidation happening in that market. This is the reason why we are seeing such a high demand for products like Codat which are expected to greatly decrease the processing time for financial data.