Expensify looks to hire bank for major funding round, sources say

15 November 2019

Expensify, a business expense management company, aims to raise at least USD 200m at a unicorn valuation to provide liquidity to early investors, according to two sources familiar with the situation. 


The San Francisco-based startup last month contacted financial advisors to run the funding round and is expected to appoint one soon, said both sources. 


The raise is expected to be completed by mid 2020, the sources said. Half of the funds raised will provide liquidity to earlier investors in what would be a secondary deal and the other half would provide fresh capital to the company, both sources noted. 


While the exact scale of proceeds is yet to be finalized, it ranges from USD 200m to USD 500m, according to both sources. The raise would give Expensify a unicorn valuation, they added, with the first source saying it would be done at a “multi-billion-dollar valuation.” 


The round is being termed as a late stage growth round/pre-IPO round, said the second source. 


Expensify, which competes mainly with SAP’s Concur, eventually wants to go public, although timing for that is not clear, said the second source. SAP acquired Concur for about USD 8.3bn in 2014. 


Expensify is profitable and has revenues of around USD 100m, according to both sources. Its topline is growing by more than 40% per year, they noted.


Expensify has developed an app that tracks receipts and manages expenses, and which the company says has millions of users.


Last month, Expensify launched its own corporate payment card called Expensify Card, which automatically enters transactions into an expense report on its platform. 


That product pits it against Brex, a richly-valued San Francisco-based startup, both sources said. Brex, whose main product is a smart corporate expense card, raised USD 100m at a USD 2.6bn valuation in June. It also competes with DivvyPay, a Leti, Utah-based business expense management startup that raised USD 200m in April, noted the first source. 


In contrast to Brex and Divvy Pay, Expensify has deliberately kept venture funding to a minimum. It has raised about USD 28m in equity and USD 11m in debt since being founded in 2008, according to various press releases. Its earliest investors include Hillsven CapitalBaseline Capital, Uber founder Travis Kalanick, and Redpoint Ventures. Later investors include Barracuda NetworksCoyote Ridge VenturesPoint Judith Capital (now PJC), and OpenView Venture PartnersCanadian Imperial Bank of Commerce, also known as CIBC, provided it with debt financing to support growth. 


Expensify declined to comment.