The Pleo app taken with a smartphone next to the FinTech company’s corporate card.
London — There is a new FinTech Unicorn in town.
Pleo, a Danish startup that sells “smart” payment cards linked to corporate expense management software, raised its valuation to $ 1.7 billion in a $ 150 million equity finance round.
This investment, led by Bain Capital Ventures and Thrive Capital, has made Pleo the latest private technology company in Europe, surpassing the coveted $ 1 billion “unicorn” valuation.
“The whole digitization and automation of the financial process has been going on for some time,” Pleo CEO and co-founder Jeppe Rindom told EuroJournal in an exclusive interview.
Pleo earns about 70% of its revenue from the exchange fees it receives from the merchant’s bank account each time a customer uses the card. Another major part of the company’s sales comes from paid subscriptions.
The coronavirus pandemic is Pleo’s “accelerator,” Lindom said, adding that the tendency to work from home offset the decline in overseas business trips. 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 executive 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 relocated to San Francisco.
Fintech is burning
Recently, several FinTech start-ups have raised surprisingly high ratings.
Sweden’s Klarna was valued at $ 45.6 billion in a round led by SoftBank. Checkout.com raised hundreds of millions of dollars in January with a $ 15 billion valuation. 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 great players like Wise, Revolut, Adyen and Klarna, some of whom are moving to double-digit billion ratings.”
“Comparing it to the value of the banking industry as a whole, it’s still very small,” he added. “This will take time. We’re talking about decades, but I think customer-first, technology-first players will win 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 United Kingdom and enhance marketing and public relations. Pleo’s main markets are currently Denmark, Sweden, Germany, Spain, the United Kingdom and Ireland.
The business isn’t profitable yet, and Lindom said he’s not going to be profitable right away. Many venture-backed start-ups focus on rapid growth 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, is considering expanding to another continent. Lindom said the United States is a competitor, but no firm decision was made.
Pleo has expanded its product range to include features such as invoice management and employee refunds. According to Rindom, the company also plans to start lending at some point, following in the footsteps of fintechs such as Square and Stripe.