Volopay, a Singapore-based startup building a “financial control center” for businesses, announced today it has raised $2.1 million in seed funding. The round was led by Tinder co-founder Justin Mateen, and included participation from Soma Capital, CP Ventures, Y Combinator, VentureSouq, the founders of Razorpay and other angel investors.
The funding will be used on hiring, product development, strategic partnerships and Volopay’s international expansion. It plans to launch operations in Australia later this month. The company currently has about 100 clients, including Smart Karma, Dathena, Medline, Sensorflow and Beam.
Launched in 2019 by Rajith Shaiji and Rajesh Raikwar, Volopay took part in Y Combinator’s accelerator program last year. It was created after chief executive officer Shaji, who worked for several fintech companies before launching Volopay, became frustrated by the process of reconciling business expenses, especially with accounting departments located in different countries. Shaiji and Raikwar also saw that many companies, especially startups and SMEs, struggled to track different kinds of spending, including subscriptions and vendor payments.
Most of Volopay’s clients are in the tech sector and have about 15 to 150 employees. Volopay’s platform integrates multi-currency corporate cards (issued by VISA Corporate), domestic and international bank transfers, automated payments and expense and accounting software, allowing companies to save money on foreign exchange fees and reconcile expenses more quickly.
In order to speed up its development, Volopay integrated Airwallex’s APIs. Its corporate cards offer up to 2% cashback on software subscriptions, hosting and international travel, which Volopay says are the three top expense categories for tech companies, and it in November 2020, it launched a credit facility for corporate cards to help give SMEs more liquidity during the COVID-19 pandemic.
Compared to traditional credit products, like credit cards and working capital loans, Shaji said Volopay’s credit facility, which is also issued by VISA Corporate, has a more competitive fixed-free pricing structure that depends on the level of credit used. This means companies know how much they owe in advance, which in turn helps them manage their cashflows more easily. The average credit line provided by Volopay is about $30,000.
Since TechCrunch last covered Volopay in July 2020, it has grown 70% month on month in terms of total funds flowing through its platform, Shaji said. It also launched two new features: a bill pay feature that allows clients to transfer money domestically and internationally with low foreign exchange rates and transaction fees, and the credit facility. The bill pay feature now contributes about 40% to Volopay’s total payment volume, while the credit product makes up 30% of its card spending.
Shaji told TechCrunch that Volopay decided to expand into Australia because because not only is it a much larger market than Singapore, but “SMEs in Australia are very comfortable using paid digital software to streamline internal operations and scale their businesses.” He added that there is currently no other provider in Australia that offers both expense management and credit to SMEs like Volopay.