Puri was the general manager of PayPal's Braintree until December. When she gave her notice in the summer, she said she wanted a break to figure out her next move.
That turned out to be with Galileo, one of fintech's top infrastructure players, which enables clients to build financing products, including debit cards and bank accounts. On Wednesday, the company will announce that it has hired Puri as its first chief product officer.
Wilkes said Puri will fill "a gaping hole."
"We weren't necessarily missing product capability, but product strategy, definition and articulation," he told Protocol. "It's about bringing somebody in that could really put their arms around that, and it felt like a natural with Archie. ... I knew that she had worked at Braintree and had done really, really good work there."
Founded in 2000, the Salt Lake City-based Galileo was acquired last year for $1.2 billion by SoFi, the startup that offers a host of financing products, including student loans, mortgages and deposit accounts.
But it remains a standalone company. In fact, it's looking to expand its reach in an increasingly competitive market, Wilkes said. "The big pushes are into new geographies," he said, citing Galileo's recent expansion in Latin America. It has similar plans for the Asia-Pacific, the U.K. and Europe.
Galileo, whose major clients include Chime, Robinhood, Revolut and TransferWise, is also looking to expand its product mix, he added. "Where do we go from here? What do we add in terms of, say, credit products, "buy now, pay later" and these types of relevant technologies?" he asked. "Those are the kinds of things that Archie is looking at."
Logan Allin, founder and managing general partner of Fin Venture Capital, a SoFi investor, said Galileo is "an older tech stack," but one of the "preeminent dominant players" in banking and credit or payments as a service. It's also a key player in the trend called embedded finance, in which financial services tools are integrated in the platforms of non-bank companies, such as online retailers, car dealerships and even tech giants like Google.
"Google [and] all these guys have come out and said, 'Hey, we're gonna create an embedded finance offering.' Well, Galileo has been doing that for 10 years," Allin told Protocol. "These other ways that embedded finance is getting integrated with fintechs and then traditional players is something that Galileo does very well. They just need to continue to evolve and add new products."
Galileo's top competitor is another payment platform, Marqeta, and "in some cases they're competing with Stripe," Allin said, but "they're very much the oldest and most scalable player with the largest customer base in the space."
In fact, Galileo's seemingly ubiquitous and dominant presence in fintech was what made it stand out for Puri when she was considering her options beyond PayPal and Braintree.
"I started doing research to go check out who were the most recent fintech players that have come up," she said. "I looked at Chime. I looked at Robinhood. I looked at SoFi. All these different players had one thing in common: The platform that they were built on was Galileo. That was mind-blowing for me."
For Puri, taking a C-suite post at a major fintech company marks a high point in her remarkable journey as a technologist. She grew up in India where her father owned a small forklift service company.
"He did well for a number of years and then suffered quite a bit of losses to the point where he had a lot of debt and no money by the time he passed away," she said. "He was our single breadwinner for the family and when we opened his wallet, he had two rupees in it. If you convert it to U.S. dollars, it's two cents."
Puri had planned a career in banking. "I was well on my way to becoming a bank clerk, but one fateful bus ride actually changed the path of my life," she said. During her commute, a little boy handed her a flyer advertising computer coding classes, which Puri decided to take.
She didn't own a computer. To practice coding, she would rent one at a neighborhood cybercafe. "I would go there and type as fast as I could, type, type, type to see if my code works; 30 minutes was all I've got. And I can't afford another 30 minutes for another week."
That launched her into a career in tech. Puri went on to work for Yahoo in Bangalore in 2005 before moving to the company's Silicon Valley campus five years later. In 2012, she joined the payments platform company Braintree, which was acquired by PayPal the following year.
Last year, Puri decided it was time to move on. She gave notice around August in order to have a smoother transition at Braintree, she said: "When you run a sizable organization and are running product and engineering, which is pretty meaningful, I think it is very irresponsible to just walk out of the door and be like, 'Two weeks notice. Bye, see ya.'"
Did she know what was next? "I was very sure I wasn't going to do anything outside of fintech, preferably B2B, because that's what I love doing," she told Protocol. "I love building platforms that power fintech so we can recede into the background so that our clients can build these beautiful experiences."
But it was toward the end of 2020 that she set her sights on Galileo as her next stop. She spent the end of 2020 trying "to figure out a way by which I could be a part of the Galileo team."
"Fintech is a small world," she said, noting how she eventually found people in her network who knew what Galileo was doing and "whether there might be something for me."
The fact that Galileo was looking for someone to lead its product team "was almost serendipity" she said.
"What I love doing the best is finding a place that was ripe for scale and had a really proven-out idea and helping that team grow and helping the business grow and really low rolling up my sleeves and getting into things," Puri said.
A key goal she will be focused on is how to make Galileo an even more effective fintech platform, she said. "What are the capabilities that we could be adding that makes it even easier for different businesses to go online? The whole idea is technology and fintech should not be accessible to a few. It should be accessible to all," she said. "You need to democratize access to fintech. That means you have to lower the bar of complexity. How do you do that? That is where most of my thinking and time will be spent on."
On Tuesday, Pindrop announced a partnership with TiVo to bring its voice authentication technology to smart TVs and streaming devices. Instead of weeding out fraudsters, the technology is now being used to personalize voice search results and present the right content recommendations to each member of the family. Soon, the company even plans to infer emotional states from a person's voice, and tweak content recommendations accordingly.
Thanks to
the unwitting help of fraudsters like Chicken Man, Pindrop has gotten
very good at dealing with background noise. During a demo given to
Protocol, an Android TV device featuring Pindrop's tech was able to
identify two different speakers even with a blender running on high
gear, as well as with one of the participants wearing a muffling N95
mask.
Personalization for smart devices is nothing new. Streaming services like Netflix and Disney+ have for years offered user profiles to personalize content recommendations. Similarly, Google and Amazon are both offering consumers a way to personalize responses from their respective voice assistants.
But while the tech and streaming giants require users to actively set up user profiles and authenticate the voices of each member of their household, Pindrop is taking a more organic approach. "We do something called passive clustering," explained CEO Vijay Balasubramaniyan. Pindrop's algorithms analyze over 250 voice characteristics, including intonation, rhythm and style.
In the living room, the technology is being used to develop unique profiles for everyone in the household; the profiles are then connected to content recommendation engines like the one developed by TiVo. Consumers can decide to name the profiles for each family member, but Pindrop doesn't need to know anything about the real identity of each user.
Once the first streaming products
powered by Pindrop launch, the startup wants to fine-tune its
technology to detect the emotion and age of consumers to further
improve recommendations. TiVo has yet to announce any products that
will feature Pindrop's technology, but Balasubramaniyan said that we
may get an update on that in the next few months. In addition to its
legacy DVR business, TiVo also launched its own Android TV streaming
dongle last year, and is licensing its voice technology to other
companies.
Pindrop's work for the living room also helped the company improve some of its other security efforts. One example: Live call center conversations are typically a lot longer than the voice commands used to search streaming services, but by optimizing for these short phrases, Pindrop was also able to improve its screening of interactions with the kind of automated call center platforms that ask consumers for one-word choices.
"Solving this problem for TV has helped us in the call center world," Balasubramaniyan said.
From Your Site Articles * Whose voice is it anyway? - Protocol > * Voice is having a moment in our work-from-home world - Protocol ... > * Google's secret home security superpower: Your smart speaker with ... > Keep Reading Show less Janko Roettgers Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland. tivo pindrop startups voice control streaming Protocol | Enterprise Why Oracle and SAP are fighting over startups Did someone mention a chance to burnish reputations and juice balance sheets? New cloud-based offerings and favorable contract terms are convincing startups to switch to software from Oracle and SAP earlier in their lives than your might expect. Jane Seidel January 19, 2021 Joe Williams Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com. January 19, 2021 In the hunt for their next big-ticket customers, SAP and Oracle are trying to cast off reputations as stodgy tech providers by making a huge push to provide their software to startups. Both companies have found themselves in choppy waters recently as potential customers have turned to the cloud, shunning the on-premises solutions SAP and Oracle are known for. That's coupled with a global pandemic that dried up demand for the expensive enterprise-grade software that drives profits at the vendors.Now, to help bolster the balance sheet, they're trying to find the next Starbucks, General Motors or Medtronic as early as possible.
"Oracle and SAP have recognized that they need to go downmarket," Valoir analyst Rebecca Wettemann told Protocol. "The reality is, there just aren't that many companies that have the appetite or the interest ... in doing a big investment."
It may surprise some to see such a focus on smaller organizations, which are typically loath to invest in what is traditionally thought of as enterprise-grade technology, especially given the cost. But improvements in the products from both providers, their pivots to cloud-based offerings and favorable contract terms are convincing founders of the value of deploying software such as an enterprise resource planning, or ERP, system from a large vendor earlier in the life cycle. So much so that, at Oracle, the startup business is growing at a clip of as much as 400% year-over-year. At SAP, the company brought 773 new customers in the space last year.
"It's been a steady plod over the past few years just to let startups know Oracle is here," said Jason Williamson, the vice president of Oracle for Startups. "Now, we're in that phase of the flywheel to really deliver on the promise."
Take the Jennifer Lopez- and Alex Rodriguez-backed startup Super Coffee. In 2018, the bottled energy drink company was finding it difficult to share daily sales data with its national team. Ultimately, it meant that only the top brass of the organization had a 360-degree view of the business. That prevented employees from, among other things, pinpointing the most successful sales strategies to use in their own outreach. So it tapped Oracle's NetSuite for an ERP system, industry jargon to refer to software that effectively helps back the most foundational business segments at enterprises, like finance and supply chain operations
"We were running our business gradually as we went, using spreadsheets," co-founder and president Jordan DeCicco told Protocol. "When we introduced the ERP, we had everything that we needed in one place and we could easily access and share it with the entire company. [Salespeople] had the same knowledge as the leadership team when they are making decisions."
Super Coffee is not alone. Other startups are using similar products to help prepare for looming growth, gain efficiency in their daily operations and broadcast the maturity of the firm to potential customers or investors, according to startup executives.
In the past, founders may have shunned the more expensive products from Oracle or SAP in favor of cheaper alternatives catered to small businesses, such as Acumatica, Intact or FinancialForce. But there's now acknowledgement that deploying the costlier solutions sooner could save on a more arduous implementation down the line. And because most of the software is now offered through the cloud, it can scale much more easily as the company grows, without the added burden of managing the tech in-house.
"We saw a lot of the companies who were the size that we wanted to be in a couple years using the tool," DeCicco said. "It was kind of a no-brainer for us."
For SAP and Oracle, the business is unlikely to ever serve as a suitable replacement for enterprise licenses, given the software is often provided at a discount and startup success is the exception, not the norm. Instead, the goal is to try to make a connection with companies before some of them hit it big. As operations expand and the workforce grows, often so do the number of software licenses; since it's costly to switch out ERP platforms, that could mean more revenue for SAP and Oracle over the long term, even if only a handful of clients see huge growth.
Electric car maker Rivian, for example, tapped SAP's S/4HANA in 2019. Since then, the startup has raised billions in funding and is reportedly close to hitting a $25 billion valuation, becoming one of the most prominent companies in the automotive industry despite having not yet shipped a finished vehicle. Rivian declined to comment for this article.
"These are companies that have high expectations for growth," SAP Senior Vice President Greg Petraetis said. "They want to move from being ramp-ups to category leaders to global leaders in what it is that they do. They want to invest in a technology stack that they will never outgrow."
Growing the pipeline is so critical that Oracle is even expanding its outreach to catch entrepreneurs early, particularly at the university level, before they even begin the work to launch a company. "You reap what you sow," Williamson said. "If we want to gain the next big startup unicorn, we have to be early."
For SAP and Oracle, the partnerships also help shed their reputations as stodgy tech providers of yesteryear. Internally, both have made strides to improve their technology to blunt this criticism, but it still takes work to persuade potential customers of the upgrades: a continual challenge, but one that likely gets easier as they win more startup business.
"We had to actually convince people in our company to give it a chance. It's not the same SAP," said Tim Flaherty, chief financial officer at medical device startup Enable Injections, an S/4HANA customer. "Back 10 years, we probably wouldn't have gone this way."
And as both of those giants move toward small businesses, rivals that already catered to that market -- such as FinancialForce, which offers a very similar product -- are also making strides toward becoming a partner that can grow alongside the startup itself. Those competitors have the ability "to be a growth partner beyond the [small business] phase. There's nothing from a capability perspective that limits them ... from supporting a large organization," said Wettemann.
For startups, deploying big-ticket software signals to both investors and customers that the company is prepared to handle any major surge in business. While even just a decade ago, such a purchase would be almost unheard of for a smaller organization, the products are becoming more "out of the box" solutions, meaning that clients don't have to go through the often time-intensive and costly customization efforts.
"Would I have considered an ERP of 10 years ago in a startup? No way. Way too clunky, way too difficult to deal with," said Livekindly Chief Information and Digital Officer Rogan Moore. But, he added, legacy ERP systems and the modern digital offerings "are very different things." The vegan food collective is relying on SAP's S/4HANA to help it rapidly scale and compete against the globe's largest food producers for ingredients and partnerships.
SAP and Oracle are also giving the companies attractive contract terms, such as set costs for additional licenses or add-on applications. Oracle, for example, provides a 70% discount on additional cloud credits or licenses for startup customers for at least two years, according to Williamson.
"We bought what we needed at the time and we have a blend of things that we have pricing on that we think we will need in the future that we managed to lock in," Moore said.
There are also other non-operational benefits, like connecting startups to potential investors or customers. Enable Injections, for example, opted to go with SAP over other providers like Oracle due to its influence within the healthcare sector. As many as 80% of pharmaceutical companies use the company's software, per Flaherty.
Clearly, there are advantages on both sides of these relationships: startups get better tools and cred with investors; Oracle and SAP get to burnish their reputation and start on the ground floor with the corporations of the future. And while the startup business isn't the most lucrative for SAP or Oracle right now, the early battles being waged could help determine the fate of earnings reports in the years to come.
From Your Site Articles * How crazy an idea is Oracle buying TikTok? - Protocol -- The ... > * How Christian Klein's reboot of SAP's strategy is working out - Protocol > * Despite an early-week scare, cloud earnings finish strong - Protocol ... > * SAP Concur is losing its president and customer chief - Protocol ... > * SAP's Christian Klein's bid to remake the company - Protocol -- The people, power and politics of tech > Keep Reading Show less Joe Williams Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com. sap oracle startups venture capital Is this a VC bubble, or just the new normal? Huge deals, little diligence and hyper-fast follow-on rounds have become commonplace. For now. Things are looking awful frothy, aren't they? Photo: Drew Beamer/Unsplash January 16, 2021 Tomio Geron Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com. January 15, 2021 The VC industry is "frothy," "overheated" or "bonkers," investors say. Whether this is the new normal or unhealthy signs of an overheated market depends on your point of view -- and how well your portfolio is doing. There are signs that VC has changed all around. In recent months, deal sizes and valuations have spiked in hot deals; due diligence on startups has evaporated as investors compete to get into hot deals first; venture firms are investing much more than they normally do; there are hyper-fast follow-on rounds; and more non-traditional investors are backing early-stage startups.In one recent example, low-code startup Retool, which helps companies quickly and cheaply build internal software tools, attracted top-tier investors who bid for a round that ended up valuing the quickly-growing company at close to $1 billion. Sequoia Capital won the deal, leading the Series B. Despite its fast growth and high valuation, Retool's annualized revenue run rate at the time of funding in October was between $5 million to $10 million, according to those familiar with the deal. (It has since jumped higher, one source said.)
That sort of sky-high revenue multiple is not uncommon for companies that are seeing strong growth and happen to fit into a particular theme that venture investors are chasing.
This shift started as far back as 2018, when tech's dominance in the market became clearer, some investors say, but has ramped up in the past six months or so. Some point to particular enthusiasm about a post-pandemic economy and perhaps a wave of relief-induced investment once the pandemic actually boosted many startup sectors, such as enterprise, ecommerce and gaming.
Whatever the original motivation, the surge of investment is being made possible by cash that's flooding into the venture industry, a trend driven by low interest rates, exuberance over unusually strong exits last year in companies such as enterprise software firm Snowflake and high valuations for late-stage companies, such as gaming company Roblox.
"Capital is flooding into the VC market because of high returns in VC," Zach Coelius, founder at Coelius Capital, said. "That leads to more investors splashing money around and driving up prices and investing in companies that shouldn't be invested in."
New macroeconomic conditions -- as well as startups growing faster and generating higher revenues than ever before -- are behind this, said Chirag Chotalia, partner at Threshold Ventures. Previous "category-defining companies" used to typically exit at $1 billion to $5 billion, but now those outcomes are $10 billion to $30 billion or higher, he said.
"We think about it as the new normal," Chotalia said. "The biggest revelation for me is the size of the outcomes really supports the quote-unquote frothiness in the cycle. In many ways, what was irrational a couple years ago is now much more rational today because of what we're seeing on the exit side."
Even if the stock market drops, these new startups still have strong fundamentals, he thinks. "The magnitude of the exits is not driven so much by the stock market but by the revenue scale and the growth rate of these companies. I don't see it nearly as cyclical as past cycles," Chotalia said. "Valuations may come down, but not these growth rates. Multiples might be questionable for some portion of companies, but revenues are here to stay, as are the growth rates."
With the fierce competition for top deals, the rigor of due diligence is declining. Startup deals used to entail days of calls and research at the seed round and weeks at Series A or later. Now seed deals can now be done in hours, and Series As within days.
"Diligence cycles have become much more compressed," Coelius said. "You don't have time to dilly-dally anymore. It's 24- to 48-hour decision cycles. You have to have done your diligence beforehand."
Investors have gone beyond "preemptive" deals where they seek to invest in a company before it searches for funding. One new strategy: VC firms might send a term sheet to a startup even before a "get-to-know-you" meeting; some even hire diligence firms to do this work for them.
"Now it's turned to firms coming in saying, 'I've done all my work; here's a term sheet,'" said Matt Murphy, partner at Menlo Ventures. "It's a way to force something on people before they're even ready."
"Everyone is saying 'I can't miss the next Snowflake at A or B or C,'" said Semil Shah, founder at Haystack. "It's not just fear of missing out: It's now fear of missing that company that could be a $100 billion company. That fear is sharpened."
What was irrational a couple years ago is now much more rational.
Another aspect that's ratcheting up is the speed of follow-on rounds. Some hot companies are raising a new round in two to three months after a previous one. "It used to be like, 'Damn, I missed it, I'll check in in six to 12 months,'" Murphy said. "Now what everyone is doing is moving to a dynamic of: 'I missed it. It doesn't matter, I'll put a term sheet in two to three months later.'"
Nontraditional startup investors, particularly in early-stage deals, could also lead to startups getting funded before they're ready. In a recent example, a venture investor pointed to the unusual case of a banking advisory firm leading a deal for an early-stage startup at the Series A. This is a step beyond investment banks leading deals, which has already been common.
The frenzy is especially focused on the hottest deals among top entrepreneurs or companies, Coelius said. It's a maxim among venture capitalists that each year there are 15 to 20 startups that will be massively successful, and those are the only companies that matter in driving investors' returns.
But this filters down to lower-quality deals. For example, companies that are not snapped up by top investors are then backed by newer investors who are trying to break into the industry. And they may be even less diligent than established firms, Coelius said.
"The risk is always: Mediocre companies raise at high valuations," said Mamoon Hamid, partner at Kleiner Perkins. "If historically you wrote $10 million checks, now you're losing $20 million [when a startup fails]. It's going to happen. But people don't think that way. They think, 'what's the upside,' not the downside."
Valuations are so high at the moment that one new firm, Apeira Capital, is seeking to create synthetic vehicles to essentially short overvalued startups. There are a plethora of companies that may be fundamentally good companies but are just overvalued due to the way that venture capitalists value and invest in them, Apeira founder Natalie Hwang said.
And despite the flood of cash going into the market, capital is not being distributed evenly, said Deena Shakir, partner at Lux Capital. The proportion of funding that went to female-founded startups in 2020 dropped to 2.3% from 2.8% in 2019, according to Crunchbase.
Venture firms investing much more than they typically do could come back to bite them. One limited partner who requested anonymity said some firms that typically make one to two deals per quarter are now making upwards of seven to nine. If it's true that there are only 15 to 20 truly winning startups in a given year, that pace could push investment returns down.
"It just can't end well," the investor said. "It almost feels like we're looking at an entire cohort [of investors] that's going to have substandard returns."
For limited partners, this could lead to trouble when it comes to exits. "There's no price diversity," said Chris Douvos, founder at fund-of-funds Ahoy Capital. "You're just playing the momentum. It's a buy high, sell higher mentality. My concern is, as a whole, the entire industry has conditioned itself to need those kinds of exits for success."
Many investors today don't think about -- or weren't around during -- the last real downturn, he added. "Pricing things for perfection and glossing over weaknesses won't hurt you in a one-way market," Douvos said. "But if there's ever a hiccup, you'll have the Icarus effect where the higher you fly, the further you'll fall."
From Your Site Articles * VC-backed startups fight exclusion from coronavirus stimulus ... > * @VCBrags Twitter parody skewers Silicon Valley VCs - Protocol ... > * What do you (VC) meme? - Protocol > * Love it or hate it, there's a new Glassdoor for VCs - Protocol > Keep Reading Show less Tomio Geron Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com. investment vc startups finance venture capital startups COVID-19 bruised TripActions' business. It chose to innovate. If nobody's booking business flights through your startup, why not help people pay for their corporate takeout instead? TripActions had to confront a world with far less travel. Photo: TripActions January 7, 2021 Benjamin Pimentel Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429. January 7, 2021 TripActions was a fast-growing startup that helped clients manage their business travel when the pandemic hit early last year. Now, almost a year later, it's also helping businesses with their work-from-home expenses. Chief financial officer Thomas Tuchscherer compared what happened last spring to being in a speeding car that was forced off a cliff -- a terrifying experience shared by most travel industry companies hit hard by the COVID-19 crisis."All of a sudden the ground vanishes, so you're flying off in this car that's not supposed to fly," he told Protocol. "It was scary while the car was up in the air, not knowing how to land it. But it forced us to focus and invest in areas that really mattered."
A major area the startup focused on as COVID-19 took hold is TripActions Liquid, a line of credit it launched last February to help clients finance their business travel. On Thursday, the company said it's expanding the service to cover a broader range of expenses at a time when business travel is still largely down.
While TripActions Liquid was mainly used to pay for clients' flights, hotels and car rental expenses when it first launched, clients can now also use the service to pay for non-travel business needs that are more relevant in the era of remote work, general manager Michael Sindicich said.
"The type of spend shifted," he told Protocol. "You're not spending on travel as much, but you're still spending on a lot of other business areas ... A lot of it is for digital advertising, it's software spend, it's work-from-home furniture. You see a lot of DoorDash. You see, now that we're just coming off the holidays, a lot of gifts to employees."
Sindicich said the startup is "leveraging a lot of fintech and different tools" to enhance the ability of businesses to manage their expenses. TripActions Liquid, for instance, uses AI to quickly approve expenses and process payments.
Tuchscherer said the decision to expand TripActions Liquid to cover expenses beyond travel was also "driven by a natural expansion to capture more spend, and also to become more strategic" to clients' finance teams, including the CFO.
"If you're only truly present we can only talk about travel, you may be speaking only with the travel managers," he said. By expanding to other expenses, "you move up the finance stack and you start speaking with more strategic financial employees, including controllers, including CFOs."
TripActions launched the line of credit in February 2020 with $500 million in debt financing from Silicon Valley Bank, Goldman Sachs and Comerica. Initially, it was geared toward making it faster and more convenient for businesses to use the TripActions travel management platform.
But then the COVID crisis caused travel bookings to plummet by as much as 90% last spring. TripActions was forced to cut costs, including a major round of layoffs, Tuchscherer said.
"We had to take the very difficult decision of letting go about a quarter of the company back in March," he said.
The company has started to bounce back as some business travel also resumed. It also began expanding the scope of TripActions Liquid, which has become the startup's fastest-growing business.
Meanwhile, investor interest has also remained strong. In June 2020, at the height of the pandemic, the company, which had raised $250 million the previous year at a $4 billion valuation, raised another $125 million from investors led by Greenoaks Capital, boosting its total tally to $600 million. The new valuation will be set when TripActions goes public, Tuchscherer said. He declined to set a timeline for the company's IPO.
Jonah Crane, a partner at the fintech-focused investment firm Klaros Group, said TripActions' decision to expand its financing business shows how startups can tweak their business model, especially during a crisis.
"It's a good example of that broader trend where a company will often start getting traction in solving one problem for your customers and then say, 'Hey, we can also, we can also help you with this other thing,'" he told Protocol. From Your Site Articles * Travel, mobility, real estate and coworking: Startups see revenue ... > * Protocol Index: COVID's killing travel tech - Protocol > * How the pandemic has changed tech business travel to China > * Coronavirus question for online travel firms: To refund? - Protocol > Keep Reading Show less Benjamin Pimentel Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429. tripactions credit money startups travel Latest Stories social Twitter's future is newsletters and podcasts, not tweets David Pierce Protocol Gaming Activision's esports endgame Shakeel Hashim Janko Roettgers fintech People Expensify CEO: 'Most CEOs are not bad people, they're just cowards' Benjamin Pimentel open source About Protocol | Enterprise 'It's not OK': Elastic takes aim at AWS, at the risk of major collateral damage Tom Krazit politics Politics This is the future of the FTC Issie Lapowsky sponsored Sponsored Content What's in store for memory and storage: An interview with Micron's Raj Hazra Kate Silver opinion The key to American economic recovery? Automation. Rick Lazio Myron Moser Source Code Reddit runs the stock market David Pierce ipo Power Everything you need to know about the Kuaishou IPO Hirsh Chitkara review Tesla vs. Mustang: The future of Ford is here Mike Murphy See more Most Popular Tesla vs. Mustang: The future of Ford is here Everything you need to know about the Kuaishou IPO Everything you need to know about the Roblox direct listing What's in store for memory and storage: An interview with Micron's Raj Hazra 'It's not OK': Elastic takes aim at AWS, at the risk of major collateral damage Clubhouse is growing. Now what? Bulletins January 26, 2021 15:22 EST Big tech companies partner at WEF to improve racial justice efforts January 26, 2021 14:00 EST Twitter launches free API for researchers with full archive January 26, 2021 12:50 EST Commerce Department nominee advocates for Section 230 reform Get Source Code in your inbox David Pierce's daily analysis of the tech news that matters. Email Address[ ] [*]Sign Me Up About UsCareersContact Us Privacy StatementDo not sellTerms of Service Get access (c) 2020 Protocol Media, LLC