LONDON – Banking startup Soldo has secured $11 million (£8.6 million) in funding for its new business service, which allows companies to manage and track employee spending via their app.
Soldo announced on Wednesday that it had closed a Series A funding round, led by tech investors Accel. Accel’s previous investments include the likes of Facebook, Dropbox, and Deliveroo.
Soldo’s app lets an unlimited number of people use a single bank account. This lets businesses minimise time-consuming and costly admin, streamline a company’s spending, and ensure all transactions are transparent and trackable.
“We were delighted our business account was first to market in the UK offering companies an entirely new way to automate company-wide expense accounting, effectively eliminating the workload required to manage cash advances for employees and track company cash flow,” says founder & CEO says in a statement Carlo Gualandri.
Soldo was originally pitched at parents who wanted to give their children a set amount of money and track how they spent it. Is the new business service a pivot?
Gualandri told Business Insider the family account was “a big research and development experiment in go-to-market and customer experience.” Soldo began, he says, with the problem of how to make group banking easier, and decided to start with the simplest type of group: the family. Working on the Family app allowed them to tackle problems, find solutions and improve features, before bringing the product to a much larger market.
“It took two and half years of development to find our real ‘Holy Grail’,” he says, “now we’ve found it.”
Although Soldo Family was a useful learning exercise, there’s no money in the consumer market for fintech banking startups, Gualandri says. Low margins mean scale is crucial in order for a company to be successful, and so it makes little sense for startups to recreate what banks already offer. PayPal is probably the first and last company to buck this trend, he believes.
In the business market, however, Soldo’s service offers efficiency, convenience and transparency, and so can command a higher margin. Unlike traditional banks, Soldo Business does not require company credit checks, since the money in an account is paid for upfront. Since payments are trackable in real time and access to an account can be granted or revoked instantly, the risk of fraud or overspending is low.
In the event of dubious transactions, Soldo also has smart security features. Soldo’s real-time updates will mean managers only need to respond to a notification to block a card or transaction.
This part of the product – the fact humans respond to an algorithm flagging a fraud-like pattern – is what, to date, has been less well developed by incumbents. Gualandri says this is the problem he wanted to solve.
“The key thing is control,” he says, “you’re the customer, you know best, we provide the tools.”
The app currently costs £5 per month per user and Soldo says it has significantly fewer additional charges than traditional banks.
Alex Wakeford, finance director of Secret Escapes, says in a statement: “We use Soldo across our UK and German companies to manage expenses in local currencies and we’re even able to use a virtual Soldo spending card for purchasing flight bundles.
“Soldo has brought tremendous efficiency to the business by reducing admin, providing our employees with more flexibility in their daily work and our finance team with an increased level of control.”
Accel’s Sonali de Rycker is joining Soldo’s board as part of the investment. She said in a statement: “We’re excited to be backing a truly world-class team with deep experience in both financial services and software, which is the killer combination needed to win in the spend management category.”
Soldo is currently marketing the Business app in the UK and Italy, although it is available throughout Europe, in English and Italian. Soldo’s Family service will continue to function, but the company’s focus will now primarily be on Business.