Float Financial, an expense management and corporate card startup focused on the Canadian market, has raised $48.5 million in a Series B funding round.
The Toronto-based fintech compares favorably to US-based fintech giants. Brex versus Like that But it says its sole focus is on Canadian SMBs, which it says is different. CEO and co-founder Rob Khazzam said, “Canada's banking industry has been overlooked because of the monopolies and difficult economic conditions.”
Goldman Sachs Growth Equity OMERS Ventures; FJ Labs; It led the financing, which included participation from Teralys and existing investor Garage Capital. The raise brings Float Financial's total venture funding since 2020 to US$92.6 million. The Company has secured a $36.9 million credit facility due in February 2024; It is being used to extend credit to customers.
The company declined to disclose its value, noting that it was “up and down” from it. Series A is US$30 million; Led and promoted by Tiger Global in November 2021.
Although Khazzam declined to disclose hard revenue figures, Since raising the Series A, Float is said to have seen a 50x increase in its revenue and a 45x increase in total payout volume. He also said it has increased assets under management by 30 times. The company is still not profitable.
Float launched its first product in May 2021, bill payment, high yield accounts; Gradually expanded offerings from corporate cards and expense management to include accounts payable automation and virtual physical cards in both Canadian and US dollars. Jane Software LumiQ, Knix is among its 4,000 customers.
Khazzam dismissed what it said was “recent media talk that Canadian businesses are not a good place to invest right now.”
“The landscape of Canadian SMBs is rich, diverse and full of potential,” he told TechCrunch. “At Float, we understand the need for a differentiated Canadian approach to addressing the needs of these businesses… Our financial system needs to match the pace and ambition of Canadian businesses if we want to grow domestically and compete globally.”
Float plans to use its new capital to further expand its product offering and regional presence within Canada and continues to hire.
Laura Lenz, a partner at OMERS Ventures, believes Float's “ability to work within the Canadian regulatory framework and… understand the nuances of this market” is critical to its success.
“Someone who is familiar with these nuances needs to be able to create a product that works,” she said. “As investors with strong Canadian roots, we know the urgent need for banking infrastructure that helps Canadian businesses keep pace with their American counterparts and remain competitive on the world stage.”
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