Divvy, which offers a platform for tracking business expenses, has raised $165 million in a funding round that includes PayPal Ventures as a new investor. This funding round puts Divvy’s valuation at $1.6 billion, the company said in a press release.
The funding included previous backers NEA, Insight Venture Partners, Acrew and Pelion along with such new investors as Hanaco, Whale Rock and Schonfeld.
Divvy said in the release that its “simplified process and cost-saving benefits are especially important to Main Street businesses that are navigating the challenges and opportunities brought on by the COVID-19 pandemic.” Since March 2020, the company has seen “a 500 percent increase in monthly signups.”
The company said its platform combines “free expense management software with corporate credit cards.” In addition, the platform “allows businesses to manage their spend” easily and gain greater control over it.
Customers include such tech companies as Noom, eCommerce merchants like Solo Stove and Rhone — and even iconic sports franchises like the Utah Jazz and the Atlanta Dream.
“With its compelling free software, Divvy is poised to become a key part of the financial nervous system for businesses,” said Peter Sanborn, managing partner of PayPal Ventures and vice president, head of corporate development at PayPal. Sanborn said his company “and Divvy share a goal of simplifying all that goes into running a business, which creates more time to focus on customers.”
Divvy offers virtual credit cards at a time when their use for payments is surging.
Nick Reid, director of B2B partner development at Conferma Pay, told PYMNTS in an interview that independent industry forecasts suggest that overall U.S. commercial card spending will grow by 20 percent over the next two years, with virtual cards accounting for almost the entirety. That would give virtual cards more than 50 percent of the market, up from an estimated 40 percent today. Reid said that those gains will primarily replace non-carded payments rather than coming at the expense of traditional plastic credit and purchase cards.