To VC, or not to VC, that is the question… Why Xpenditure turned down 20 Series B offers
Last week we announced some big news. We agreed to partner with Sodexo, one of the world’s largest multinationals, and travel booking specialist iAlbatros. We’ve created a new company that will house both businesses and the new venture will work on an exciting new project, one that will help us realise our vision of becoming a truly global player.
Now that the dust has settled, I wanted to talk through what this means for us and why we chose a partnership at this point in our growth.
So what does this mean?
The founders have personally invested in the new venture, the team remains the same and we’ll continue to work on our great products and provide great service.
But the really exciting thing is the potential for what the three companies can achieve together. Xpenditure’s growth to date has already been significant, but this partnership will mean our growth is supercharged. We will be scaling our team all over the world to build an even more phenomenal end-to-end product, with extraordinary customer support for our customers both now and in the future.
Why we didn’t raise a Series B
Before I talk about the new venture, it’s worth looking at why we made the decision we did. It’s fairly usual for a company in our position - scaling quickly, great market penetration - to take on another round of VC funding.
We’ve been there before. In 2013 we raised around $3m in seed and in 2015 we raised $5.7m in Series A funding, which was absolutely the right thing to do at that time. We have been on an incredible growth trajectory, and I’m proud to say we have a lot of happy investors, who have enjoyed being part of an exciting scale-up. At the beginning of 2017, we were in a position to do it all again and seek our Series B.
We received over 20 very attractive offers from some well-known VCs. Xpenditure fits the mold of a fast growing, cash healthy tech company with a well-loved product, history of innovation, extremely low churn rates and huge potential market, so we found it relatively easy to get commitments. But would another round of funding really propel us into the big leagues? A VC backs companies with money, but this new venture is so much more, giving us unparalleled access to resources, customers, products & brand trust all from day one.
We started speaking to Sodexo. They loved our product and they shared our vision for the business. They also fully understood that our market is currently dominated by a small number of key players, and another round of VC funding doesn’t necessarily get you a seat at the table. They were on the lookout for a partner in this space and we’re so pleased they have chosen Xpenditure over dozens of other expense management providers.
Our vision is to become a truly global player in business travel and expenses for the enterprise market, and I firmly believe that this partnership will allow us to realise this.
By partnering with Sodexo we have access to the experience, customer base and resources of one of the world’s largest multinationals. Our partnership with iAlbatros, will combine the Xpenditure proposition with ‘Maya’, a cutting edge business travel booking solution. This means that, for the first time, we will be able to provide a full, end to end business travel and expense experience, targeted at major enterprises. It’s the combination of the firepower of a major multinational, and the agile, innovative technology of two market-leading scale ups. It’s little surprise that since we announced the partnership we’ve had expressions of interest from two major enterprise customers. So fasten your seatbelts.
It’s an incredibly exciting time for all three businesses. On a personal level, I’m so pleased that we retain our amazing team in its entirety, with the Xpenditure founders and I fully on board as committed shareholders of the new venture.