Airbase, a corporate expense management startup, announced this morning that it now supports subsidiaries in different countries for US-based companies. As more companies turn to remote work, and many startups are being founded on multiple continents, the new capacity could boost Airbase’s total effective addressable market.
The product news is interesting, but more so when we consider Airbase’s feature decisions in the broader context of the corporate expense management space itself. Competing startups offer customers corporate cards and a suite of software to help them manage spend more generally, along with other functionality that varies by provider.
TechCrunch has spilled a lot of ink in recent months tracking Airbase Ramp and Brex competitors, for example, as they raise capital and seek to differentiate their products to better serve their target markets. They’re doing it for both pricing decisions and feature options.
Airbase, though perhaps less well known than its rivals, was early in the decision to charge for its software, in addition to earning trade-in income from its business. Brex added a paid software package at a friendly price for SMEs. Ramp is sticking with his zero-cost weapons for now.
Now, with supporting international subsidiaries and currencies for US-based companies, Airbase is running against its vision of providing expense management services for businesses from startup to IPO, founder and CEO Thejo Kote told TechCrunch in an interview.
In more detailed terms, Airbase supports payments to some 200 countries, as well as support for moving money more generally in a more restricted geographic area.
The product news fits Airbase’s goal of supporting businesses even as they scale. Other competitors in your market have a more SME focus, it seems. Not that that’s a diss; Offering corporate spending services as a free package has proven lucrative for some businesses looking to incorporate a large number of smaller businesses. Divvy did it and it sold for more than $ 1 billion. And Ramp and Brex are pricing their services so they’re affordable for smaller businesses.
Airbase offers a free tier, but more as a method of attracting customers that could scale to large accounts on time, he explained. Those larger accounts are the startup’s target. Kote said during a conversation that his company now has a series of customers who pay six figures per year for its software, a change from when the company raised $ 60 million earlier this year, when such account sizes were rarer. .
By adding more capabilities for multinational companies, Airbase may be able to land more large customers, which, in turn, would generate both software and trading income for the startup.
Kote also revealed new growth metrics for Airbase, albeit in relative rather than absolute terms. The startup has scaled annual recurring revenue, a metric that estimates a company’s annualized subscription software sales, by 3.5 times in the past 12 months, he said, and twice in the past half year. Kote also revealed that his company is “approaching” $ 2 billion in annualized payment volume through his service, a 5-fold increase in the past 12 months.
Now in the process of digesting its B-Series, Airbase has graduated from baby-start metrics, and we’ll expect something a little more difficult the next time we cover the company.
Still, as Airbase looks to support larger companies longer, we’re seeing an interesting divergence among corporate spending startups battling for North American market share. With three major players charging nothing, little, and a lot, it’s not hard to guess where each will focus their product efforts in terms of customers.