UK-based startup Codat raises $10 million from Index Ventures to expand into the US, media reports said. Codat is focused on integrating data systems of small businesses to banks, fintechs and other financial institutions.
In practice, the startup has a single API that plugs into software used by small businesses, enabling them to access accounting information in real-time. For financial institutions, the software allows them to accelerate their internal processes and offer insights for businesses into their next loan or insurance product.
With the fresh round of funding, Codat seeks to foray into the US market and build its workforce. Codat was founded in 2017 by Lord, Alex Cardona and David Hoare. Last year, Codat won £5 million grant from the Royal Bank of Scotland, media reports said,
The startup has already started working on its New York City office. It is reported that Index partner Jan Hammer and venture partner Stephane Kurgan will join the company’s board soon.
Codat Co-founder Alexander Cardona, said in a statement, “Taking an ‘Open Accounting’ approach enables banks to have greater access to real-time accounting data. This helps banks provide faster and more accurate lending decisions for small businesses, while managing risk effectively. With the ability for banks to make quick lending decisions based on real-time insights, [SMBs] feel valued, and [lengthy] paper-vetting processes are avoided.
Open banking and APIs are becoming an integral part of UK’s small business banking.