Coast Raises $40 Million in Series B Funding to Revolutionize Transportation Financial Services

Coast, a startup that positions itself as a "financial services platform for the future of transportation," has secured $40 million in Series B funding. This achievement comes just four months after the company announced a $25 million venture round and $67 million in debt financing.

Back-to-back fundraises like Coast’s were common during the high investment periods of 2021 but have been rare since the venture capital market downturn in 2022, making Coast’s recent funding noteworthy.

Based in New York, Coast compares itself to companies like Ramp and Brex, having developed expense management software tailored for fleet operators and their employees. The startup has also created a commercial charge card designed specifically for businesses that operate vehicle fleets. This niche focus has proven successful, as Coast's CEO and founder, Daniel Simon, reported a 10-fold increase in both annualized revenue and payment volume over the last 18 months, despite not disclosing specific revenue figures.

Coast serves "thousands of businesses" across various industries, including HVAC, plumbing, landscaping, pest control, construction, government fleets, and long-haul trucking. The company has issued over 100,000 cards, with customers ranging from small businesses with a few fleet cards to large enterprises with more than 1,000.

The Series B round was led by ICONIQ Growth, with participation from existing investors Accel, Insight Partners, Vesey Ventures, and Avid Ventures, as well as new investor Thomvest. Additionally, Synchrony provided a separate strategic investment, aligning with its partnerships with major tire and auto parts retailers like Discount Tire and Pep Boys. With this latest funding, Coast has secured nearly $100 million in equity since its inception in late 2020. Although Simon did not disclose the startup’s latest valuation, ICONIQ Growth General Partner Yoonkee Sull has joined Coast’s board of directors as part of the new funding.

Simon noted that with ambitious growth goals and the uncertain capital markets environment, it was prudent to secure additional capital. Coast continues to grow among small and mid-sized businesses and has seen an acceleration in the adoption of its expense management product for non-fuel use cases. In these new segments, non-fuel usage has grown to over 30% of spending and is increasing steadily.

Coast generates revenue through interchange fees from merchants when customers use the Coast card for purchases. It also charges a flat subscription fee of $4 per month for each card actively used to make payments.

Recently, Coast launched a mobile app that simplifies tracking receipts, matching them to job codes, and verifying transactions for its customers. The company plans to use its new capital for product and partnership development, including offering accounts payable automation and bill payment services.

Coast's workforce has grown from about 50 employees a year ago to around 65 and plans to expand to about 85 employees by the end of the year.