What do you call the gray area between a series A and a series B? If the money is taken opportunistically in 2020, it is called an expansion of the A-1 series, according to Teampay. Even if the new capital was raised at a new, higher valuation.
At least that's what Teampay CEO Andrew Hoag did with his company's new $ 5 million investment and added it to Serie A of Serie A in September 2019. TechCrunch covered that round and the company's $ 4 million launch round in 2018 to keep track of the expense management company as it grows.
In fact, since the Serie A announcement, Teampay has seen huge growth, increasing Annual Recurring Income (ARR) by 320% and Total Spend under Management by 800%. The first number implies that we managed to get a good monetization because the usage, the second number, has seen an increase.
Teampay, Hoag said in an interview, wants to help companies control their bank accounts. This has become more difficult in 2020 as companies have moved from one office with many employees to many employees in home offices. The increasing complexity of running businesses after COVID-19 and its economic disruptions have been a boon for the startup. Teampay saw the sales cycle cut in half, the CEO said, and larger companies came to their door looking for help.
The startup is targeting medium-sized businesses with its spending software, helping companies control what Hoag sees as a business process problem, not just a spending ability problem. Teampay does not want to reinvent the company card, but rather to provide a set of tools that companies can use to manage their outflows no matter what format they use (ACH, virtual cards, etc.).
Unlike Divvy or Brex, Teampay generates most of its revenue from software fees instead of exchange revenue, though the company has told TechCrunch that it can generate more revenue from expenses over time. On the subject of competition, Teampay has many in different forms. Brex and Ramp and Divvy and Airbase as well as old-fashioned products like Concur and Expensify are on the market.
With a new $ 5 million led by Fin Venture Capital that included previous investors like Crosscut and Tribe, as well as the ubiquitous forerunner, Teampay has new ammunition for the hunt.
With this increase, Teampay has raised $ 21 million in known equity funding to date. I asked Hoag why the new round isn't simply referred to as Serie B. He said that the 2020 letter series round delineations (true) lost some of their specificity, undermining the main thrust of my dispute, and that this round it was also small to be called Series B (also true).
Instead, Teampay has moved part of its future Series B forward due to the large growth, presumably to help the company do more today in anticipation of its later, more traditional next round.
TechCrunch has been doing aggressive rounds of renewals in the past few months, putting Teampay in good company with companies that are doing well, which has resulted in them raising more capital to go even faster. Let's see how far it can bolster its ARR ahead of its real Serie B.