Rho Raises $75M Series B for Corporate Spend Management
Rho Secures $75 Million Series B Funding
Rho, a corporate spend and cash management firm, has announced the successful completion of a $75 million Series B funding round. Dragoneer Investment Group spearheaded the investment.
Existing investors, including Inspired Capital, M13, and Torch Capital, participated in this round. Additionally, new investors such as DFJ Growth contributed to the funding.
Total Funding and Future Plans
This latest investment brings Rho’s total equity and debt financing to $205 million. The New York-based fintech intends to allocate these funds primarily towards technological advancements.
According to CEO Everett Cook, the company will focus on developing “more expansive products” to comprehensively address all aspects of corporate spend and cash management.
Responding to Customer Needs
Cook stated that this strategy of creating a unified platform is a direct response to customer feedback. Rho specifically targets companies with between 30 and 500 employees.
These SMBs are seeking streamlined processes encompassing banking, corporate cards, and accounts payable. Sam Fort, a partner at DFJ Growth, emphasized the company’s dedication to automating back-office functions.
Fort believes Rho is building a platform capable of enabling “self-driving” finance within organizations.
Integrated Product Suite
Rho’s commitment to an integrated approach has already resulted in the launch of Rho AP, its accounts payable product, following the Series A funding in January.
The corporate card offering was subsequently introduced in May. These services, including the card, are powered through a partnership with Sterling National Bank.
The company explicitly states that it collaborates with various providers, including banks, to deliver comprehensive financial services under the Rho brand.
Capturing the Corporate Card Market
Similar to Rho AP, the Rho Card is central to the company’s ambition to become the primary financial platform for finance teams. It also represents an effort to gain a share of the substantial U.S. corporate card market.
The Nilson Report estimates that commercial card purchase volume in the U.S. approached $1.4 trillion this year. This explains the increasing number of fintech companies offering their own card solutions.
Examples include Expensify, Bill.com’s Divvy, Brex, and Ramp.
Rapid Growth and Key Metrics
Despite the competitive landscape, Rho is experiencing significant growth. Cook reported that annualized transaction volume increased from under $2 billion in December 2020.
Between January and November 2021, the cumulative transaction volume reached $3 billion. November’s transaction volume translates to a $6 billion annualized run rate.
This demonstrates accelerated growth for the company, which was founded in 2018 and launched in 2020. Cook attributes this success to the continuous expansion of the platform’s capabilities.
The addition of corporate cards and accounts payable to the core banking platform has been instrumental.
Team Expansion and Leadership
Concurrently, Rho’s team has grown to 80 employees, operating from New York and remotely. A recent key hire is Sebastjan Trepca, the new Europe-based CTO.
Trepca’s arrival will allow co-founder Alex Wheldon to concentrate more fully on product strategy, according to Cook.
Rebranding and Future Outlook
Previously known as Rho Business Banking, the product will now simply be referred to as Rho. The company’s legal name, Rho Technologies, remains unchanged.
Trepca, who previously co-founded the U.K. fashion search platform Lyst, consulted with Rho and contributed to a recent redesign unveiled alongside the funding announcement.
Cook expressed hope that the brand will not be confused with any new COVID-19 variants.