API for small business data Codat secures $100 million in Series C funding round
Codat, the universal API for small business data, announced that it has raised $100 million (£82.8m) in a Series C investment round led by JP Morgan Growth Equity Partners.
Canapi Ventures and Shopify also participated in the round and Plaid has been publicly named as an investor for the first time. Existing investors Index Ventures and PayPal Ventures also participated in the round. As part of the financing, Patrick McGoldrick, Partner at J.P. Morgan Growth Equity Partners will join Codat’s board.
Codat’s API is used by SaaS, lending and payments companies to build integrated products for their SMB customers. Whether that’s a neobank building a cashflow forecast in their app, or a payment provider enabling merchants to sync transactions with their accounting software, there is a use case for Codat in almost every fintech serving SMBs.
The investment comes less than a year after Codat announced a Series B investment round last July led by Tiger Global, alongside American Express and PayPal Ventures. Codat reports that it now has over 200 clients, including many of the world’s largest banks as well as rapidly growing fintechs such as Brex, Jeeves, Pipe and Clover, and a team of 250 people across the UK, North America and Australia.
Codat will use the funds to build out their critical infrastructure to be the default means of sharing data for the small business economy.
“Today, we’re in the age of ‘dial-up’ when it comes to business data,” commented Pete Lord, Codat’s CEO. “Despite radical advancements in other areas of technology, in 2022 the majority of small business systems still don’t speak to each other, creating hours of painful admin and serious barriers to growth.
“No one will be speaking about SMB financial software integrations in five to ten years – automated data flows over the Codat platform will be a presumed standard. The only time you’ll notice integrations is when they are not there. With the impressive caliber and strong sector expertise that J.P. Morgan and Patrick bring to our board, alongside our other advisors, we couldn’t be in a better position to capitalize on the massive opportunity in front of us.”
The Series C funding round is made up mainly of strategic investors, demonstrating the collective industry buy-in to the increasing importance of connectivity in the future of finance and the growing role of Codat as a means to integrate with small business systems. JP Morgan, Plaid and Shopify are all already partners, clients or collaborating with Codat.
Patrick McGoldrick, Partner at J.P. Morgan Growth Equity Partners said: “We believe Codat has the potential to fundamentally change the way data is shared across the small business economy. JPMorgan Chase has an extensive small business customer base so we understand the power of connecting and standardizing data – whether it is used for onboarding new customers or offering insights on business performance. This unique global perspective and Codat’s impressive management team deepened our conviction.”