Codat is a London-based technology company that lets banks and fintechs plug into their small business customers and the software they use, giving them seamless access to real-time data. It now has plans to head to the US, striving to become the leading platform for small business data.
“Many small businesses don’t even know that Codat exists, but we put the needs of these companies at the forefront of everything we do,” said Pete Lord, chief executive and co-founder of the London-based technology company ahead of its international expansion.
Over the last three years, it has connected the internal systems of small firms to banks, fintechs and other financial institutions, allowing business data to flow to and fro in real-time. Currently, the Codat platform enables financial organisations, such as iZettle and Experian, to integrate with the likes of Xero, Quickbooks, Sage, Kashflow, FreeAgent, Freshbooks, Clearbooks, Exact, Wave and Zoho Books – all via a single, developer-friendly API.
The number of people who are interacting with Codat’s technology without realising is growing rapidly. Tens of thousands of small businesses use apps, services and financial products that are powered by the data expert every month and it aims to reach a target of 300,000 SMEs benefiting from its integrated products by 2022.
“One of the great things about what we do is getting to work with a huge range of clients who are doing something different to make life easier for small businesses,” comments Lord. “When I start to think about all the different apps that are built upon our platform, that’s when it starts to get very exciting.”
“Because our clients can use the Codat offering to power whatever product or service they’re providing to small businesses, we don’t set the use case for our technology, it is set by our client’s applications and what they build.”
Founded by Alex Cardona, David Hoare and Peter Lord in 2017, Codat currently has 60-plus clients across a range of different industries around the world, including insurance payments, cash flow forecasting, point of sale software, corporate cards, debt collection, automation, travel management and venture capital.
In June, it raised $10million in Series A funding from international venture firm Index Ventures, and in August was awarded a £2.5million grant by Banking Competition Remedies (BCR), building on the £5milion Codat received from BCR in 2019 – one of only two successful applicants from 2019 to be awarded a second grant.
In the past few months, Codat has secured strategic partnerships with Visa and Microsoft with the aim of giving banks and enterprise financial service firms easier access to SME financial data. It also leveraged products in development to build and deliver a solution for the Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) which has been deployed by UK Tier 1 & 2 lenders.
Despite operating in times of global uncertainty, for Codat it’s ‘full steam ahead’ with the start of its international expansion plans underway, and more ‘big name’ collaborations to come.
Lord and his family have recently moved to New York to oversee the launch of Codat’s first US office in New York. It has a small ‘but growing’ team out there, many currently working remotely – and its US and Canadian client base is ‘expanding quickly’.
“Although the UK is obviously our home market, we have had clients from around the world since we first started almost four years ago, and the US and Canada is at the centre of our focus on expanding internationally,” said Lord.
“Business lending is one of the largest and most impacted sectors affected by the coronavirus and there will still be a challenge for lenders to continue to get money out the door and fund small businesses, while at the same time minimising costs, defaults and frauds.”
“We have a strong pipeline of household names and larger institutions that we’re in the early stages of working with that we look forward to announcing more broadly soon. It’s an exciting time but it’s also a turbulent time, especially for many of our clients. Covid-19 has transformed lots of the sectors that we operate in.”
Throughout the past 12 months, Codat has expanded its integrations with a wider variety of data sources – as well as accounting and banking data, its clients can now view their customer’s eCommerce and point of sale data.
“We recognise that businesses use a number of different systems to run their business and those systems all need to be in sync,” said Lord. “Financial service providers need to replace siloed data with a connected ecosystem of unified financial data sources. We will be focusing on how data from these siloed systems can come together.”
“Depending on our clients’ products and what the connectivity we’re providing powers, our help could range from not having to manually enter the e-commerce sales data into their accounting software right through to putting their best foot forward when they apply for funding, because the lender who they’re applying to has access to the most up to date and holistic information on their business.”
“We’re doing our part to enable clients to leverage the technology, connectivity and data we provide to make better decisions faster and ultimately serve more small businesses.”