Mesh Payments closes at $60 million as demand for its business spend offering increases

Financial management startup Mesh Payments landed $60 million in new funding, 10 months after its last raise.

Founded in Israel and now based in New York, Mesh Payments is part of a growing group of startups focused on helping businesses manage their spending through automation.

It's a hot, crowded space that includes Ramp, Brex, and Airbase, among others, and more recently, TripActions and Rho.

For its part, Mesh claims to have seen its revenue rate triple in the first half of 2022, since its increase in November 2021. The company now has more than 1,000 customers and nearly $1 billion in volume of annualized payment (TPV) passing through its platform.

Simply put, Mesh aims to help its customers automate and get real-time insights into their spending. Like its competitors above, it also has a corporate card offering. But uniquely, according to Mesh co-founder and CEO Oded Zehavi, it also offers a numberless corporate card, which he describes as "the industry's only numberless physical VISA cards with the flexibility, control and virtual card security".

“We also offer greater integration into organizational systems that can bring insights not only related to the payment transactions themselves, but also beyond your spending,” he added. The company helps customers manage expenses ranging from travel and expense (T&E) to SaaS subscriptions.

Despite the growing number of competitors, Zehavi believes that "the market opportunity is still significant".

Alpha Wave led Mesh's latest funding, a Series C that closed earlier this month and included participation from existing backers including Tiger Global, TLV Partners, Entrée Capital and Meron Capital . Its total raised to date is $123 million.

“Previous investors used the pro rata rights they had and are adding more beyond the rights they had in this round,” Zehavi said. "We will have most of Series B in the bank, but we wanted to have enough cash to grow and scale at the current rate."

The executive declined to share Mesh's new assessment, saying only that it was a "significant increase".

According to him, the company was "disciplined" when it came to valuation.

“Many rounds are flat or falling these days, especially in our space – many companies have grown at high multipliers relative to revenue generated,” Zehavi told TechCrunch in an interview. "Our activity tripled, but we kept the same multiplier, which allowed us to increase our valuation compared to the previous round."

Asked about concrete revenue numbers, the executive pointed to his company's annual volume of $1 billion, and the fact that it generates nearly 2.5% in trade to provide insight "d 'a ballpark figure' of where Mesh from a revenue standpoint.

The company's sweet spot is the middle market, with clients including Monday.com, Hippo Insurance, Sezzle, Riskified and Snyk, among others.

Today, Mesh has around 150 employees, with its product and R&D functions headed from Tel Aviv, as well as sales and marketing in the United States. The company has a leadership suite that is 60% female, including its chief operating officer, chief financial officer and chief purchasing officer.

The company plans to use its new capital primarily to "double" its R&D investments, as well as its go-to-market strategy.

“We are amazed by the adoption and opportunities this space brings,” said Zehavi. "And we see that the banks are still not taking any action."

Mesh claims its clients are "5x more efficient" and their finance teams are saving an average of three days a month using its offering.

Earlier this year, Mesh partnered with global payroll services provider Papaya Global to "eliminate friction in managing employee expenses." He foresees other similar partnerships in the future.

Rick Gerson, co-founder, president and chief investment officer of Alpha Wave Global, notes that “the best CFOs seek to get the most out of every dollar and every hour, especially during turbulent economic times” .

"The number of businesses that are ready to find new and better ways to spend less and save more is quite large and the Mesh team is delivering a top-notch solution that is continually improving," said- he said in a written statement. .