Less than a year after launching its corporate virtual card solutions, Australia-based DiviPay has announced new funding from the venture capital arm of ANZ Bank.
Reports in the Sydney Morning Herald on Saturday (Sept. 28) said the VC unit, ANZi, led a $1.56 million funding round for the startup, which also saw participation from Seed Space Ventures and Patrick Tuttle, the former chief executive of Pepper Money.
In an interview with the publication, DiviPay founders Daniel Kniaz and Russell Martin explained the employee spending friction that led to the development of their virtual card tool for businesses and their employees.
"What we found was it was very difficult for small businesses in Australia to get access to corporate cards," Kniaz said. "Either they would require staff to use their own money, or maybe there would be one or two company cards that would get passed around the office. One business used to photocopy the company card so it was in the top drawer of about 30 people's desks."
In addition to a lack of efficiency, this strategy can be a significant security and fraud risk for a company, while also limiting the ability for managers to manage and analyze employee spend. DiviPay first formed as a consumer virtual card solution, then pivoted to become a B2B FinTech, allowing companies to customize and integrate their spend policies into the virtual credit card program.
The solution also integrates into businesses' existing financial and spend management platforms including Xero, QuickBooks and MYOB. At present, DiviPay services about 150 business customers.
DiviPay said it plans to use the latest funding to grow its staff and further strengthen its product offering, though did not provide details on potential new features or services. But collaborating with ANZ will enable the startup to access core banking and financial products upon which it can innovate, the company noted.
In a statement, ANZi Managing Director Ron Spector said DiviPay's solution "solves a very real pain point for business owners and aligns with our focus on building relationships with emerging growth companies that can support our customers, bankers and partners."
In the U.S., a similar startup, Brex, raised $100 million last June for its own service connecting businesses to virtual commercial cards on-demand to strengthen spend controls and management.