Codat raises $10 million

Codat, a London-based tech startup that connects the internal systems of small businesses to banks, fintechs and other financial institutions, allowing business data to flow back and forth in real time – has raised $10 million from Index Ventures, the backer of Adyen, Plaid and Robinhood.

Founded in 2017, Codat uses a single API to directly plug in to the software used by small businesses – allowing financial organizations to access everything from the company’s accounting software to payment terminals recording real-time transactions.

The new funds will help Codat expand to the US and grow to 100 people by the end of the year. To date, Codat enables 10,000 new small businesses each month to link directly to the 50 financial providers it works with, which include fintechs, insurance companies and banks.

“The way small businesses interact with banks has been broken for a long time. They operate in a system that’s clumsy and unable to scale. Reviewing balance sheets, for example, soon becomes a nightmare of data requests and manual entry. Coronavirus has exposed those weaknesses for all to see, and accelerated the urgency of digitisation. At Codat, we’re trying to shift the model for business communication from being like exchanging letters in the post, to instead having an intelligent real-time platform that automates communication and builds trust between the parties.” – Peter Lord, CEO and co-founder of Codat.

“It’s simply luddite for so much business data to travel over email. Codat represents a huge opportunity to increase the bandwidth and speed of business interactions. It makes data exchanges between businesses smoother and more responsive, as it allows systems to communicate electronically and seamlessly with each other in real time. We believe Codat represents a step-change that will dramatically expand businesses’ access to capital, customers and new commercial possibilities.” – Jan Hammer, Partner at Index Ventures.