Expense software startup Divvy today announced that it has raised a $35 million round led by New York-based private equity and venture capital firm Insight Venture Partners. That brings the total amount of funding raised for the Lehi, Utah-based startup to $57 million.
The fresh injection of capital is notable given that Divvy launched its first product out of beta just six months ago. There aren’t many startups in Utah that have raised this amount of money so soon after launching. For reference, Podium, another Lehi-based B2B startup, raised a $32 million round after being in business for about three years.
Taking some cues from Venmo, Divvy has created an expense platform that allows employees to send a spending request to their boss and receive approval in real time via a mobile app or desktop platform. That eliminates the need for employees to submit an expense report at the end of the month. Divvy partners with Wex Bank to issue Divvy-branded Mastercards and makes money by taking a cut of the interchange fee generated after a transaction.
Divvy is calling its latest fundraise a series B round, but it comes two months after the company raised $10.5 million and six months after a $7 million raise, so it’s not following traditional series B timing. Divvy cofounder and CEO Blake Murray said in a phone interview with VentureBeat that Divvy has been in contact with Insight for the last several months, before even launching its product. Insight came to the table with plenty of cash to invest, having just closed a $6.3 billion fund.
“[Insight] has a lot of success in building hypergrowth companies, and we just feel like they can help us get there,” Murray said.
“We are thrilled to partner with Divvy to transform corporate expense tracking from a reactive to proactive process,” Insight Venture Partners’ Jeff Lieberman said in a press release.
Currently, Divvy has more than 700 companies signed up as customers. However, Divvy is free to use, so the real test of the company’s staying power will be how long customers stick with it. Murray said in the roughly six months since Divvy’s been publicly available, less than 1 percent of customers have dropped out.
Murray also said that the company plans to use the new round of funding to build a regional sales team in California — its first outside of Utah — as well as adding to its product, marketing, and engineering teams. Murray told VentureBeat that Divvy is currently spending about $60,000 per month on marketing, but will certainly increase that budget in the coming months.
Other investors include Utah’s Pelion Ventures and the CEOs of two well-established Utah tech companies — Domo and Pluralsight — who came on as angel investors.
Divvy has more than 70 full-time employees.