Founded in London and based in New York, Codat, a fintech platform that provides universal API for small business data, announced that it has secured a $100M in a Series C round of funding led by JP Morgan Growth Equity Partner (also led Arcadia’s $200M, last month).
Canapi Ventures, Shopify, Plaid, and existing investors like Index Ventures and PayPal Ventures, participated in the round. As part of the round, Patrick McGoldrick, Partner at J.P. Morgan Growth Equity Partners, will join Codat’s board.
In fact, JP Morgan, Plaid, and Shopify are all already partners, clients, or collaborating with Codat. The announcement comes in less than a year after Codat announced a Series B investment round last July led by Tiger Global.
In total, JPMorgan has made around 14 fintech and consumer acquisitions or investments since 2020 including Nutmeg, OpenInvest and more.
How will the funding be used?
The company will use the funds to build out its critical infrastructure to be the go-to platform for sharing data for the small business economy. The company has raised over $160M to date in funding.
“Today, we’re in the age of ‘dial-up’ when it comes to business data,” says 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 5-10 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.”
Universal API for SMBs
Founded by Alex Cardona, David Hoare, and Peter Lord in 2017, Codat offers API to SaaS, lending, and payments companies to build integrated products for their SMB customers.
Codat’s use cases include automatic reconciliation, business dashboarding, and loan decisioning. The company has over 200 clients, including banks and fintechs such as Brex, Jeeves, Pipe, and Clover, and a team of 250 people across the UK, North America, and Australia.
Currently, the company has offices in London, New York, San Francisco, and Sydney.
Patrick McGoldrick, Partner at J.P. Morgan Growth Equity Partners says, “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.”
Jeff Kennedy, Corporate Development at Shopify, comments: “At Shopify, we’re always looking to support companies that are aligned with our mission to make commerce better for everyone. We’re thrilled to participate in Codat’s Series C because we know how important it is for our merchants to have all of their systems in sync. Unlocking this connectivity is the key to helping them scale more efficiently.”
“Creating an open data ecosystem for small businesses has lagged behind the progress we’ve seen in the consumer sphere, despite SMBs accounting for more than half of the world’s GDP,” commented Plaid’s head of business and corporate development, Jason Pate. “Digitising financial services has proven to save people time, money, and financial stress and should unlock even more benefits for small businesses.
Pate adds, “Codat is a leader in this space and we are looking forward to building on several years of successful partnership and supporting them in their next stage of growth.”