Coast Raises $40M to Streamline Fleet Management with Integrated Charge Cards and Real-Time Expense Tracking – AlleyWatch

There are approximately one million companies in the United States that operate fleets of vehicles, with an average fleet size of 40 vehicles. Managing a commercial fleet involves a variety of considerations, including financing, maintenance, route optimization, insurance, and fueling. Coast offers a comprehensive fleet management platform and integrated charge card system designed specifically for fleet vehicle spend. The solution provides real-time visibility into fuel purchases, seamless tracking of employee spend, and integration with existing fleet management tools. Coast focuses on companies with field service fleets, such as HVAC, plumbing, and construction. Charge cards are accepted wherever Visa is accepted. On the revenue side, Coast earns an interchange fee along with a monthly fee of $4 for each card issued. Fleet operators earn a $0.02 rebate per gallon of fuel purchased while ensuring employee vehicle and fuel spend is in line with spending policies with increased oversight.

Observing the alley I met with the founder and CEO of Coast Daniel Simon to learn more about the company, the company’s strategic plans, the latest round of financing and much, much more…

Who were your investors and how much did you raise?
We raised $40 million in Series B equity financing led by ICONIQ growthThey were joined by existing investors Accel, Insight Partners, Vesey VenturesAND Passionate entrepreneursand new investors ThomvestThis brings Coast’s total equity financing to approximately $100 million.

Tell us about a product or service offered by Coast.
Coast offers a modern, technologically advanced expense management software platform with a commercial charge card – similar to solutions offered by companies like Ramp and Brex – but designed specifically for the large and underserved sector of companies that manage fleets of vehicles.
Fleets like these have data needs that regular corporate cards don’t provide. They need granular, line-item visibility into their employees’ spend. For example, they want to know how many gallons of each grade of fuel are being purchased for a given vehicle and make sure their employees’ spend is in line with company policy when they’re out in the field.
Coast provides employees of these companies with a simple way to pay for gas and other vehicle expenses while they’re at work, anywhere Visa is accepted. Coast provides finance and fleet management teams with powerful tools to control spending policies and gain visibility into employee spending, so they can focus on growing their businesses faster.

What inspired you to start Coast?

We started this business at the height of the COVID-19 pandemic, when logistics and the mobile workforce, the essential workers on the front lines that keep the economy running, were under enormous strain. These “real” business workers—delivery workers, plumbers, HVAC installers, taxi drivers, and limo drivers—are sometimes overlooked by the tech industry. But they are the hidden forces that power the digital age, making every Amazon package or Shopify purchase, every DoorDash delivery, and every Uber ride possible. As our society has demanded more of these workers during the pandemic, the needs and struggles of their communities have become even more apparent to us. We set out to build a company that would improve the work lives of mobile workers while helping their employers thrive.

What makes Coast stand out?
Coast redefines the product category with best-in-class security and expense controls, real-time transaction data and reporting, and integrations with fleet management and telematics software. Coast software provides fleet managers with powerful policies and controls that they can customize to meet the needs of the diverse workforce and vehicles in their fleet on the job.

What market is Coast targeting and how big is it?
Annual fleet fuel transactions made using these specialized cards are estimated to total a staggering $120 billion in the U.S.
Coast focuses on field service fleets such as HVAC, plumbing, construction, as well as passenger transportation and local delivery fleets.

What is your business model?
We collect fees through the Visa network from the merchant when our customers use their Coast card to make purchases. We also charge customers a flat subscription fee of $4 per month for each card that is actively used to make payments in a given month. We offer the customer a simple 2¢ cashback on every gallon purchased. We also offer larger, improved discounts when customers shop at our many partners, including ExxonMobil, 7-Eleven, Speedway, RaceTrac, Casey’s or one of many others.

How are you preparing for a potential economic slowdown?
Above all, this fundraising provides the company with the resources to weather any storm that comes its way, as long as Coast manages its capital responsibly. More importantly, Coast avoids concentration in its client portfolio and serves thousands of companies across a variety of industry categories. While Coast participates in the growth of companies that benefit from boom times, such as construction, we also serve companies that are less exposed to economic cycles, such as those in residential plumbing or electrical services. This broad client base ensures that the company maintains revenue even in recessions.

What was the financing process like?
As we began building our relationship with ICONIQ Growth over the course of several months, both teams became increasingly excited about the opportunity to work together. ICONIQ understood and believed in our vision and knew we had the tenacity to execute, and we were equally impressed with the resources and commitment ICONIQ has to helping its portfolio companies grow. Given our ambitious growth goals and the uncertain capital markets environment, it made sense to add additional capital to the company, and ICONIQ seemed like the perfect partner for the job.

What were the biggest challenges you encountered while raising capital?
Venture capital markets have shown significantly reduced activity post-2021, and capital is not as readily available to startups as it was in previous years. Despite this, Coast’s proven growth, sustainable business model, and loyal customers have inspired continued enthusiasm from our existing investors and piqued the interest of our new lead investor, who has thoroughly researched our product and market and is eager to commit.

What factors about your company prompted investors to write a check?
A huge market opportunity, rapid growth and commercial traction, and the development of multiple effective customer acquisition channels through marketing, sales and distribution partners. But most importantly, hearing from our customers that they love the Coast product and that it is definitely better than anything they have used before for fleet and fuel payments.

What milestones do you plan to achieve in the next six months?

• Implementation of a first-of-its-kind mobile application that facilitates the collection and verification of transaction data for fleet payments.
• Developed specialist expense management functionality that supports our clients’ financial processes, including job codes and integrations with field service management software.
• Integration with new platforms used by our customers, including fleet management, telematics, accounting and ERP platforms.
• We are building additional partnerships with fuel brands, fleet management companies, service software providers and other key suppliers to our customers.
• We are growing our team at our headquarters in New York City and in our growing office in Utah.

What advice can you give to New York companies that have not received a new injection of capital into the bank?
Focus on profitable and capital-efficient customer acquisition and unit economics. but don’t neglect investing in growth. If you have a truly differentiated product and your customers stick with your product, the capital is available to fuel fast-growing products that customers love.

How do you see the company developing in the near future?
We intend to use the new capital to continue to invest in building a best-in-class product for the fleet business, including expanding into other financial services needs of business customers, such as accounts receivable and bill payment automation. We currently have a team of approximately 65 employees, mostly headquartered in New York City, and a growing presence in our second office in Utah, which we opened earlier this year. The company is actively recruiting to expand headcount across our functions. We will focus on product development, adding new integration partners, and supporting business expenses beyond fuel. Over time, as alternative vehicle energy evolves and gas becomes easier to purchase to power a combustion engine, we will also power a transaction that charges the battery of an electric vehicle that drives an HVAC installer to work or a driver delivering a package to its destination.

What is your favorite summer destination in and around the city?
A pond in Prospect Park, Brooklyn!

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