Expense and payment provider Expensify this quarter is “really going to market in a serious way” with its “New Expensify” app, with which it aims to penetrate a largely untapped market for corporate expense management, according to CEO and founder David Barrett.
Among the 300 million businesses around the world, less than 1 percent are using expense management platforms such as SAP Concur, which Expensify sees as a big opportunity, according to Barrett. That includes the “very small business” segment with just 20 or fewer employees, and among that full untapped market, about two-thirds are businesses with 50 or fewer total employees, Expensify reported in its recent first-quarter earnings announcement, basing it on U.S. Census data.
Reaching the segment, however, is a challenge.
“You can’t just sell your way to 300 million businesses,” Barrett said in an interview with BTN. “It just cannot be acquired in the traditional fashion.”
Everyone is just trying to recreate Concur, with the same business model, the same basic product and the same technology stack. Concur is a great company, but the world doesn’t need 100 of them.”
– Expensify’s David Barrett
For one, those companies have no interest in the typical expense management platform on the market, he said. If they did, they would already be on one.
“There’s no shortage of expense management and travel providers out there, but all of them are different flavors of the same thing,” Barrett said. “Everyone is just trying to recreate Concur, with the same business model, the same basic product and the same technology stack. Concur is a great company, but the world doesn’t need 100 of them.”
As such, Expensify, which reported 688,000 average paid members as of the first quarter, is eschewing the traditional sales and marketing strategy and aims to go viral among that segment. Even with the “classic” Expensify app, that was already a strategy, with the capability for employees to sign up before their employers. Business travel in that segment is not necessarily flying coast-to-coast; it might be a drive to Home Depot to pick up some lumber, Barrett said. If an employee decides to use Expensify to report that purchase to their boss, that’s a potential customer pick-up for Expensify.
The “New Expensify” doubles down on that strategy, particularly with enhanced capabilities for setting up chats between friends, colleagues and clients as well as capabilities for handling personal finances, according to the company. A user can send a chat request, for example, to anyone, and they don’t need to sign up to Expensify to participate in that chat. The idea is to pull them in as individual users, which will eventually expand across their businesses.
Expensify designed its new app as a “super app” in the nexus of payments, document sharing and chat. All of those areas have companies that have already succeeded with a similar marketing strategy—Venmo, Dropbox and WhatsApp, for example—and combining them into a single platform has the potential to do the same, as Barrett said expense management is the intersection of those use cases.
“No enterprise company has gotten to that scale, but a lot of viral companies have gotten to that scale,” he said.
Expensify added a new travel platform last month as well, built on the Spotnana platform. “Travel and expense is not a new combination, but for small companies, it has not been cost effective,” Barrett said. “We think travel is an upsell. It doesn’t matter if it’s a 10-person company; they still want the ability to book travel within travel policy.”
The single platform adds efficiencies, according to Barrett. For example, a supervisor’s expense approval often is delayed simply because they would have to log in to a separate platform to do it; if it was within the same platform they are using for general business chat, they would be less likely to procrastinate, meaning the employee is reimbursed quicker, he said.
The intersection of chat and travel/expense has been of growing interest among suppliers in recent years, such as with Amadeus Cytric’s partnership with Microsoft 365, which integrates the platform into Microsoft Teams, among its use cases.
Expensify’s targeting of small businesses does not mean it does not plan to serve larger businesses as well. The long-term strategy, of course, is that some of those companies with a handful of employees grow into bigger or even global enterprises.
“Small businesses just grow faster than large businesses, and we never want a company to outgrow us,” Barrett said.
The strategy also does not mean Expensify doesn’t have a sales staff equipped to respond to traditional methods. If a company wants a sales demo, the team is in place to do that, he said. Trying to win business from competitors, however, is not their top priority.
“We think every company over 500 employees, they already have some solution in place or are just trading back and forth,” Barrett said. “If you are going to capture the market, you want to capture a company before they’ve switched back and forth between the different players and hold onto them.”
