The Pleo application taken with a smartphone next to the company card of the FinTech company.
London – There’s a new FinTech Unicorn in town.
Pleo, a Danish startup that sells “smart” payment cards linked to business expense management software, raised its valuation to $ 1.7 billion in a $ 150 million fundraising round.
The investment, led by Bain Capital Ventures and Thrive Capital, made Pleo the last private tech company in Europe, surpassing the coveted $ 1 billion valuation of “unicorn”.
“The whole digitization and automation of the financial process has been going on for quite some time,” Pleo CEO and co-founder Jeppe Rindom told CNBC in an exclusive interview.
Pleo derives about 70% of its income from the exchange fees it receives from the merchant’s bank account each time a customer uses the card. Another significant portion of the company’s sales comes from paid subscriptions.
The coronavirus pandemic is Pleo’s “accelerator”, Lindom said, adding that the trend to work from home is offsetting the decline in overseas business travel. He said the company’s customer base more than doubled to 17,000 in 2020.
After the investment, Bain Capital Ventures’ Keri Gorman will join Pleo’s board of directors. Gorman previously held senior positions at accounting software provider Zero and US Bank Capital One.
Pleo is also a rare example of a billion dollar tech company that has emerged in Denmark. The founder of Pleo was an early employee of Tradeshift, a $ 1.1 billion fintech originally based in Copenhagen but moved to San Francisco.
FinTech is on fire
Recently, several FinTech start-ups have achieved surprisingly high marks.
Sweden’s Klarna was valued at $ 45.6 billion in a round of funding led by SoftBank. Checkout.com raised hundreds of millions of dollars in January with a valuation of $ 15 billion. Meanwhile, a relatively lesser-known payment software company called Mollie raised $ 6.5 billion in funding just a few weeks ago.
“I think we’re just getting started,” Lindom said. “Obviously there are big players like Wise, Revolut, Adyen and Klarna, some of whom are growing into double-digit billions in audiences.”
“Comparing it to the value of the banking sector as a whole, it’s still very small,” he added. “It will take time. We’re talking decades, but I think the customer-centric and tech-driven players will win over the entire financial industry in the long run. “
With the latest cash injection, Pleo has raised $ 228.8 million so far. The company plans to use new funds to increase its presence in countries such as the UK and improve marketing and public relations. Pleo’s main markets are currently Denmark, Sweden, Germany, Spain, UK and Ireland.
The business is not yet profitable and Lindom has said it will not be right away. Many venture-funded start-ups focus on growing quickly rather than making money. According to Rindom, Pleo is growing rapidly and is currently expected to generate annual recurring revenue of $ 100 million.
In the future, Pleo, which operates exclusively in Europe, plans to expand to another continent. Lindom has said the United States is a competitor, but no firm decision has been made.
Pleo has expanded its product line to include features such as invoice management and employee reimbursements. According to Rindom, the company also plans to start lending at some point, following in the footsteps of fintechs like Square and Stripe.