Air base, a corporate expense management startup, announced this morning that it now supports subsidiaries in different countries for US-based companies. Establishing across multiple continents, the new capacity could boost Airbase’s total effective addressable market.
The product news is interesting, but more so when we consider Airbase’s role decisions in the broader context of the corporate expense management space itself. Competing startups offer customers corporate cards and a software suite to help them manage spending more generally, along with other features that vary by provider.
TechCrunch has spilled a lot of ink in recent months track Airbase Ramp and Brex competitors, for example, as they raise capital and seek to differentiate their products to better serve their target markets. They are doing this through pricing decisions and feature options.
Airbase, though perhaps less well known than its rivals, made the decision to charge for its software in addition to earning exchange income from its business. Brex added a paid software package at an affordable price for SMEs. Ramp is sticking with his zero-cost weapons for now.
Now, with support for international subsidiaries and currencies for US-based companies, Airbase is executing against its vision of providing expense management services for companies from inception to IPO, said the founder and CEO. Thejo Kote to TechCrunch in an interview.
In more detailed terms, Airbase supports payments to about 200 countries, as well as support for moving money more generally in a more restricted geographic area.
Product news fits Airbase’s goal of supporting businesses even as they scale. It seems that other competitors in your market have a greater focus on SMEs. Not that that’s a dislike; Offering corporate spending services as a free package has proven lucrative for some businesses looking to join a large number of smaller businesses. Divvy did it and it sold for more than a billion dollars. And Ramp and Brex are pricing their services so they’re affordable for smaller businesses.
Airbase offers a free tier, but more as a method of attracting clients who could scale to large accounts on time, he explained. Those larger accounts are the startup’s target. Kote said during a conversation that his company now has multiple customers who pay six figures per year for its software, a change from when the company raised $ 60 million earlier this year, when those account sizes were rarer.
By adding more capabilities for multinational companies, Airbase is able to land larger clients, which, in turn, would generate both software and exchange revenue for start-up.
Kote also revealed new growth metrics for Airbase, albeit in relative rather than absolute terms. The startup has scaled annual recurring revenue, a metric that calculates annualized subscription software sales at a company, by 3.5x in the last 12 months, he said, and 2x in the last half. Kote also revealed that his company is “approaching” $ 2 billion in annualized payment volume through its service, a 5-fold increase in the last 12 months.
Now in the process of digesting its Series B, Airbase has graduated from baby startup metrics, and we’ll expect something a little more difficult the next time we cover the company.
Still, as Airbase looks to support larger companies longer, we are seeing an interesting divergence among corporate spending startups battling for North American market share. With three major players charging nothing, a little, and a lot, it’s not hard to guess where each will focus their product efforts in terms of customers.