Airbase Adds Spend Support for International Subsidiaries

Airbase Expands Support for International Subsidiaries

Airbase, a company specializing in corporate spend management, has recently announced the addition of support for subsidiaries located in various countries, specifically for businesses based in the United States. This new functionality arrives as remote work becomes increasingly prevalent and numerous startups establish operations across multiple continents, potentially expanding Airbase’s overall market reach.

Context within the Corporate Spend Management Landscape

This product update is noteworthy, particularly when viewed in relation to the broader competitive dynamics of the corporate spend management sector. Companies operating in this space typically provide customers with corporate cards and a software platform designed to streamline spend management, alongside a range of additional features that differ depending on the provider.

Recent coverage by TechCrunch has closely followed the progress of Airbase competitors, such as Ramp and Brex, as they secure funding and refine their offerings to better cater to their respective target audiences. These efforts are being pursued through both strategic pricing adjustments and the introduction of new features.

Airbase distinguished itself early on by implementing a software subscription fee in addition to generating revenue from interchange fees associated with its business. Brex subsequently introduced a paid software package targeted at small and medium-sized businesses (SMBs). Ramp, however, continues to maintain a zero-cost model.

Airbase’s Vision for Comprehensive Spend Management

With the introduction of support for international subsidiaries and multiple currencies for U.S.-based companies, Airbase is actively pursuing its objective of delivering spend management solutions to businesses throughout their entire lifecycle, from initial startup phase through to an initial public offering (IPO). This was conveyed by founder and CEO Thejo Kote in a recent interview with TechCrunch.

Specifically, Airbase now facilitates payouts to approximately 200 countries and offers enhanced capabilities for managing financial transactions within more geographically limited regions.

This product enhancement aligns with Airbase’s commitment to supporting companies as they grow and scale. It appears that other competitors in the market are concentrating more on the SMB segment. Offering free corporate spend services has proven successful for some companies aiming to attract a large number of smaller businesses, as demonstrated by Divvy’s acquisition for over $1 billion, and the pricing strategies of Ramp and Brex.

Airbase does provide a free tier, but primarily as a means of attracting potential customers who may eventually evolve into larger accounts. The startup’s primary focus remains on securing these larger clients.

Growth and Revenue Metrics

Kote indicated that the company now has a growing number of customers who are paying six-figure annual fees for its software, a significant change from earlier this year when such account sizes were less common. This shift occurred following the company’s recent $60 million funding round.

Expanding capabilities for multinational corporations could enable Airbase to attract more substantial clients, thereby increasing both software revenue and interchange income.

Kote also shared updated growth metrics for Airbase, presented as relative changes rather than absolute figures. The startup has experienced a 3.5x increase in annual recurring revenue (ARR) – a key metric representing annualized subscription software sales – over the past 12 months, and a 2x increase in the last six months. Furthermore, the company is “approaching” $2 billion in annualized payment volume processed through its platform, representing a 5x increase year-over-year.

Looking Ahead

As Airbase continues to integrate its Series B funding, it is transitioning beyond the typical metrics associated with early-stage startups. Future reports will likely focus on more robust performance indicators.

The evolving strategies of corporate spend management startups reveal an interesting divergence as they compete for market share in North America. With three major players adopting distinctly different pricing models – free, minimal cost, and substantial fees – it is becoming clear where each company will concentrate its product development and customer acquisition efforts.