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Extend, the virtual credit-card platform focused on participants of the gig economy, has raised $11 million to expand its service, add clients and make new hires.
The Series A funding round announced on April 10 was led by Point72 Ventures and FinTech Collective, with participation from Reciprocal Ventures and City National Bank. Point72, a global asset management firm led by hedge-fund billionaire Steven A. Cohen, also gave Extend $3 million last year as part of a drive to invest in fintech startups.
The time is right for a company like Extend.The U.S. corporate card industry is worth $1.6 trillion, and the country’s gig economy stands at $864 billion, according to BusinessWire.
While fintech has seen an explosion of apps and services recently that aim to make the transfer of money easier, Extend has zeroed in on a specific point for small businesses and those that hire temporary employees. Instead of enabling direct payments as Venmo or Zelle does, Extend enables access to credit.
The New York-based startup does this through its app by allowing businesses to issue virtual credit cards to employees and contractors. The cards, which are temporary and come with a spending limit, make it possible for those employers to give gig workers access to capital without having to share company cards or issue reimbursements.
“Contractors and freelancers are forced to pay for client expenses like travel, conferences and research materials, only to wait weeks, or even months, to be reimbursed. With Extend, businesses can instantly give these gig workers a credit card when they need one, without compromising on control or efficiency,” Extend co-founder Guillaume Bouvard told Karma Network.
Bouvard, who is also the company’s COO and chief marketing officer, was an executive at American Express prior to founding Extend in 2017 with two other financial-industry veterans.
In a statement about the funding, FinTech Collective’s Gareth Jones said Extend is helping build “critical infrastructure that will redefine how corporate credit cards can be distributed,” a key issue as more companies hire contractors rather than full-time employees and look for ways to reduce overhead.
“Virtual cards are an area which will continue to see major innovation this year,” Jones added.
Ambreen Ali is a freelance writer and editor based in the New York City area who specializes in business and technology. She has 15 years of reporting experience, including covering Capitol Hill and reporting from South Asia.