With a rise in last-mile delivery and an increasing need for more capacity on the road, payments and finance startup Coast aims to provide advanced technology for managing fleet-related expenses.
Founded by Daniel Simon and former Lyft executive Andrew Woolf, the company announced Wednesday it has raised an oversubscribed $6 million seed round following its initial $3.5 million round in September. The latest round was led by Better Tomorrow Ventures with participation from Avid Ventures, Bessemer Venture Partners, BoxGroup, Colle Capital Partners, Foundation Capital, Greycroft and SciFi VC.
Over a dozen angel investors from other fintech and FreightTech startups participated in the round, including founders from Flexport, Plaid, Marqeta, Albert, Addi, Lithic and Bread, a company co-founded by Simon which sold to Alliance Data Systems for over $500 million in 2020.
As part of the round, Sheel Mohnot, a general partner at Better Tomorrow Ventures, will join Coast’s board of directors.
Coast plans to release a new credit card and finance platform that would allow fleet managers better visibility and transaction control of their drivers’ spending.
While it will not be available until late 2021, the card will allow drivers to facilitate transactions anywhere Visa is accepted, enabling them to use the card for any business-related costs. The inability to do so is a common critique of legacy players in the transportation fintech space.
Coast plans to charge a flat subscription fee of $2 per card, with no hidden purchase fees or interest earned on customer balances as the card’s balance will be due in full at the end of each statement period, according to the company’s website.
Coast noted that the card will initially only support fuel transactions but it plans on unrestricting the cards over time while giving fleet managers the ability to customize spending based on days of the week, work schedules and restricted driver budgets.
Funding details: Coast
|Funding amount||$6 million|
|Funding round||Seed round|
|Lead investors||Better Tomorrow Ventures|
|Secondary investors||Avid Ventures, Bessemer Venture Partners, BoxGroup, Colle Capital Partners, Foundation Capital, Greycroft, SciFi VC and angel investors including founders from Flexport, Plaid, Marqeta, Albert, Addi, Lithic and Bread|
|Business goals||Launch card service and financial platform|
|Total funding||$9.5 million|
Managers will also be provided transaction-level reporting through the company’s dashboard to track purchasing habits of the carrier company, its trucks and individual drivers. It also plans to create integrations with common accounting software including Quickbooks, Sage and Xero.
While the industry has historically turned to a few large financial players in the space who hold leverage with discount partnerships in services like hotels, prescriptions, scale services and parking, Coast plans to disrupt the market with technology that it says it is currently lacking.
“They need their employee and vehicle payments integrated into the rest of their operations, and they need fair and transparent financial products that are simple to understand,” Simon said in a statement to TechCrunch.