Bread Founder Launches Fintech Startup, Secures Millions in Funding

A New Fintech Venture Emerges: Coast

Following the sale of his previous company, Bread, a consumer purchase finance and payments startup, to Alliance Data Systems for a sum exceeding $500 million last year, Daniel Simon promptly began developing a new entrepreneurial endeavor.

Addressing a Gap in Fintech

Simon observed, during the pandemic, the significant challenges faced by businesses operating in the 'real world' – including truck drivers, plumbers, HVAC technicians, and delivery personnel. He noted a lack of innovative fintech solutions tailored to the needs of the substantial fleets sector.

The Founding of Coast

Partnering with Andrew Woolf, a former executive at Lyft, Simon established Coast. The company’s core mission is to become “the financial platform powering the future of transportation.”

Seed Funding Secured

The New York-based company has recently announced the successful completion of a $6 million seed funding round, which was oversubscribed and led by Better Tomorrow Ventures.

Investors in the Round

Avid Ventures, Bessemer Venture Partners, BoxGroup, Colle, Foundation Capital, Greycroft, and SciFi VC (led by Max Levchin) participated in the round. Furthermore, over a dozen angel investors, including founders from Plaid, Flexport, Marqeta, Bread, Albert, Addi, Lithic, and other fintech and logistics companies, also contributed.

The Problem Coast Aims to Solve

Businesses managing fleets require a means to authorize driver payments for vehicle-related expenses, such as maintenance, emergency roadside assistance, and fuel, while on the move.

Limitations of Existing Solutions

Traditional small business credit cards prove inadequate for fleets exceeding a few vehicles. They lack the granular security, visibility, and control essential for a mobile workforce, as Simon explains.

Specific Control Needs

Fleet owners require the ability to authorize transactions, ensuring purchases are made for company vehicles and limited to specific items, like fuel, at the pump, rather than convenience store goods.

Shortcomings of Current Fleet Cards

While specialized fleet and fuel cards offer these controls, Simon contends that the companies providing them are largely unchanged since their founding decades ago, exhibiting minimal innovation.

Coast’s Approach to Payments

Coast intends to leverage technology to deliver intuitive and user-friendly payment products to fleet business owners and their employees.

A Focus on Integration and Transparency

They need integrated employee and vehicle payments within their existing operations, alongside fair and transparent financial products that are easily understood, according to Simon. He aims to replicate the simplicity and transparency Bread brought to e-commerce for this often-overlooked segment.

The First Product: A Commercial Fuel Charge Card

Coast’s initial offering, scheduled for release later this year, is a commercial fuel charge card. Drivers can utilize a physical card carried in their wallet or a shared card kept within the vehicle.

Transaction Security and Policy Enforcement

When swiped at any Visa-accepting pump, Coast will perform a swift evaluation against a complex set of rules to enforce the fleet’s policies and identify potentially fraudulent activity, as Simon details.

Streamlined Driver Experience

“Drivers simply fill up and continue their route, without the need for manual data entry prompted by the pump,” he states.

Fleet Management Tools

Fleet owners and managers can utilize Coast’s web portal to assign drivers and vehicles, establish purchasing policies, and monitor expenses. They will also receive reporting and alerts regarding policy compliance and potential misuse.

Monthly Billing and Future Integrations

At the end of each month, fleet owners can settle their Coast balance in full. The company plans to integrate with major accounting platforms and telematics systems, providing actionable spending insights.

Expanding the Platform

Over time, Coast intends to broaden its scope to encompass additional categories of fleet business spending, evolving into a comprehensive platform for the industry.

Investor Confidence

Sheel Mohnot of Better Tomorrow Ventures, who has joined Coast’s board, expressed his firm’s enthusiasm for both the market opportunity and the strength of the Coast team.

Disrupting a Stagnant Market

“This is a large, unglamorous sector dominated by established players that customers often find frustrating. It’s an ideal environment for a startup to introduce a significantly improved experience,” Mohnot explained via email.

A Parallel to Ramp and Brex

“Just as Ramp and Brex serve startups, Coast provides fleet operators with spending control, allowing them to concentrate on business growth,” he concluded.