Danish start-up Pleo becomes Europe’s latest unicorn

The firm plans to use the fresh funds to boost its presence in countries like the U.K. and ramp up marketing and PR

Danish start-up Pleo, which sells corporate expense management software and linked smart payment cards, has secured $150 million in an equity financing round, boosting its valuation to $1.7 billion.

The investment, led by Bain Capital Ventures and Thrive Capital, makes Pleo the latest privately-held tech company in Europe to surpass the $1 billion unicorn valuation.

The whole digitization and automation of finance processes has been going on for a while, Jeppe Rindom, CEO and co-founder of Pleo, told CNBC in an exclusive interview.

Pleo makes nearly 70% of its revenue from interchange fees taken from a merchant’s bank account every time a customer uses their card. The other main chunk of the company’s sales comes from paid subscriptions.

The coronavirus pandemic has been an “accelerator” for Pleo, Rindom said, adding that the working-from-home trend offset a decline in international business travel. The company’s customer base more than doubled over the course of 2020 to 17,000, he said.

With its latest cash infusion, Pleo has raised $228.8 million to date. The firm plans to use the fresh funds to boost its presence in countries like the U.K. and ramp up marketing and PR. Pleo’s main markets are currently Denmark, Sweden, Germany, Spain, Britain and Ireland.

The business is not yet profitable, and Rindom said he’s not aiming for profitability any time soon. Many venture-backed start-ups focus on rapid growth over making money. Rindom said Pleo is growing fast, and was currently on track to hit $100 million in annual recurring revenue.

Further down the line, Pleo is considering an expansion beyond Europe. Rindom said the U.S. was a contender but no firm decisions had been made.

Pleo has been expanding its range of products to include features like invoice management and employee reimbursement. Rindom said the company also planned to roll out lending at some point, following in the footsteps of fintechs such as Square and Stripe which have also moved into credit.

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