Codat raises $100m from JP Morgan in Series C round
New York-based Codat, a provider of universal API for small business data, has raised $100 million in a series C investment round led by JP Morgan Growth Equity Partners. As part of the deal, Patrick McGoldrick, partner at JP Morgan Growth Equity Partners, will join Codat’s board.
Canapi Ventures and Shopify also participated in the round, as well as existing investors Index Ventures and PayPal Ventures.
Plaid has been publicly named as an investor for the first time. The two firms already have a business partnership whereby Plaid’s product is integrated into Codat’s API, enabling clients to access banking, accounting and commerce data via a single integration. They count Rho Business Banking and Atom Bank among their joint customers.
Codat’s API is used by Software-as-a-Service (SaaS), lending and payments companies to build integrated products for their small and medium business (SMB) customers.
“Whether that’s a neobank building a cashflow forecast in their app, or a payment provider enabling merchants to sync transactions with their accounting software, there is a use case for Codat in almost every fintech serving SMBs,” the vendor says.
The investment comes less than a year after Codat announced a Series B investment round led by Tiger Global, alongside American Express and PayPal Ventures. The company has raised over $160 million to date.
Founded in 2017, Codat now claims 200+ clients, including fintechs such as Brex, Jeeves, Pipe and Clover, and a team of 250 people across the UK (London), North America (New York and San Francisco) and Australia (Sydney).
The vendor aims to build “the default means of sharing data for the small business economy” – “the internet for business data”. It says it has already demonstrated the economic impact of its infrastructure – the SMBs sharing and syncing data to other systems via Codat’s technology have grown on average 2.7 times faster than GDP in 2021.
“Today, we’re in the age of ‘dial-up’ when it comes to business data,” comments Pete Lord, CEO of Codat.
“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 five or ten 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.”