Financial product API dev Codat picks up $100m

Codat, an API software developer, has received $100m in its Series C funding round, which was led by JP Morgan Growth Equity Partners.

Canapi Ventures and Shopify also joined the round, as did existing Codat backers Index Ventures and PayPal Ventures.

With the capital, the company plans to deepen its critical infrastructure to become the default means of sharing data for the small business economy. It claims its technology, similar to how the internet transformed the world, will underpin the flow of small business data, giving way to tools, capabilities and opportunities not yet seen or imagined.

It claims the effects of this have already been seen, with SMBS sharing and syncing data to other systems via Codat’s technology have grown on average 2.7 times faster than GDP in 2021.

Codat’s API is currently used by lending and payments companies to build integrated products for their SMB customers. For example, a neobank building a cashflow forecast in their app or a payment provider enabling merchants to sync transactions with their accounting software.

It claims to have over 200 clients, Brex, Jeeves, Pipe and Clover.

As part of the investment, Patrick McGoldrick, partner at J.P. Morgan Growth Equity Partners, will join the Codat board of directors.

Codat CEO Pete Lord said, “Today, we’re in the age of ‘dial-up’ when it comes to business data. Despite radical advancements in other areas of technology, in 2022 the majority of small business systems still don’t speak to each other, creating hours of painful admin and serious barriers to growth. No one will be speaking about SMB financial software integrations in 5-10 years – automated data flows over the Codat platform will be a presumed standard.

“The only time you’ll notice integrations is when they are not there. With the impressive calibre and strong sector expertise that J.P. Morgan and Patrick bring to our board, alongside our other advisors, we couldn’t be in a better position to capitalise on the massive opportunity in front of us.”

Codat previously raised $40m in a Series B investment round in 2021, which was led by Tiger Global, alongside American Express and PayPal Ventures.

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