Extend
CEO: Andrew Jamison
Headquarters: New York
Last Funding Round: 2021
Lead Investors: B Capital, Plug and Play, Wells Fargo, March Capital, Reciprocal Ventures
As “neo-banks” become a growing force in the corporate payment space, one technology provider is giving traditional banks additional ammunition in their battle to court and hold corporate customers.
As its name implies, the Extend platform, via bank partnerships, lets users “extend” existing card products by issuing virtual cards that can be paid on the original card’s account. The company reported 10,000 businesses in the U.S. and Canada using its platform, each spending on average more than $100,000 a month.
Bank profits are driven by payment volumes, not selling software, but neo-banks—fintech companies, such as Brex and Ramp, that can offer corporate payment services—have been eroding those volumes for banks, particularly among midmarket clients, by offering a “seamless, single-point solution” that can handle a broad range of their needs, said Extend CEO and co-founder Andrew Jamison. These can include card management and distribution, expense management and integration to ERPs, he said. They have benefitted from a “gap” in services from the traditional banks, between the consumer offerings used by large companies and enterprise applications used by companies on the smaller end of the scale, he said.
Extend’s role is “to create a defense for the traditional banks, where you can use the card you already have in the pocket, take a few minutes to register and get these broader capabilities,” Jamison said.
With current bank partners, which include American Express, HSBC and BMO, Extend’s footprint currently can cover about 55 percent of business cards in circulation, Jamison said, and the company has other issuers in its “line of sight” that could bump that figure up to 75 percent. With those relationships, Extend does not go out directly to win clients but instead “supports banks in their initiatives to engage their client base,” Jamison said.
While Extend has “broad use” in the midmarket, there also is room for a “limited, more refined use” among large-market programs, he said.
“When you think about big corporations, everything is controlled, but they usually have a slug of spending that doesn’t fit neatly in those segments,” Jamison said. “There are uncarded employees, or they bring in 800 interns twice a year, so how do you manage the group set who don’t get corporate cards and need to travel?”
For 2024, Extend, which is privately held, reported a 35 percent increase in customers year over year and a 50 percent increase in payment volume. One of its strategies to continue that growth is to focus on the “last mile” of payment, expense and data integration that typically “has not been well-catered for, outside of the enterprise segments,” Jamison said.
“There’s a narrow [group] of people who will leverage pure innovation,” he said. “Then, you have the main majority, who are just waiting for that to arrive on the card they have, because they already have a relationship, and they aren’t going to switch.”
The key is working in those customers’ existing workflows, rather than requiring them to have a new piece of software, user ID and login, he said. Extend already has integrated with SAP Concur, embedding its virtual card functionality into Concur Invoice so that users can pay invoices within that workflow using their corporate cards. Jamison said he expects to see that trend continue, with technology making more possible within, for example, the workflows of such accounting software as NetSuite and QuickBooks.
“I think the time is right in that B2B space for that embedded leap to happen,” he said.
