Payments

Through its partnership with Airbase, Amex dives deeper into SMB banking

  • The corporate spend space has seen a boom in funding recently.
  • The nascent popularity could give companies like Amex deeper inroads to SMB banking.
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Through its partnership with Airbase, Amex dives deeper into SMB banking

On February 16, Amex announced that its venture capital arm Amex Ventures is investing in spend management platform Airbase. Along with that, the credit card company is launching a pilot program that will let its SMB clients get access to Airbase’s spending platform. This also means that Airbase’s users can get access to Amex virtual cards.

“We are helping our joint customers consolidate and automate all non-payroll spend, making spend management easier, more efficient, and transparent,” said Thejo Kote, founder and CEO of Airbase.

Founded in 2017, Airbase incorporates employee reimbursements, bill payments, and corporate cards. As of its $60 million-funding round in June 2021, Airbase was valued at $600 million. The company also saw significant growth last year, including three times the ARR and eight times the payment volume it had last year.

There’s been a lot of talk and investor interest around corporate spend lately and key players in the industry have been getting pretty flattering funding rounds. 

This month Ramp announced that its recent funding round put its valuation at $8 billion. Meanwhile last month, Brex raised $300 million and reached a valuation of $12.3 billion. TripActions, which responded to the pandemic by going from corporate travel to corporate spend, said in October it was valued at $7.25 billion. 

As corporate spend companies boom, they could give traditional financial institutions a chance to dive deeper into the SMB banking space. Mastercard, for example, recently partnered with Corpay One, a bill pay solution for SMBs, to offer a Corpay Mastercard, which can be integrated into the Corpay platform.

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American Express may be a particularly interesting case, though. The company has a history of focusing on SMB clients. This goes back to the late eighties, when Amex created the Small Business Partnership – a council made out of successful small business representatives. At the same time, it also started offering specific tools for SMBs. In 2010, meanwhile, it kicked off its Small Business Saturday initiative, which motivated consumers to shop at local businesses by offering special deals.

And in recent years, Amex seems to be drilling down even more on serving SMBs. In 2020, it acquired Kabbage, a fintech lender focused on small businesses. Through the acquisition, Amex launched a debit card and digital checking accounts for SMBs in 2021.

Now, through its partnership with Airbase, Amex is solidifying its role in the SMB banking space even further.

“We want to be a digital one-stop shop for managing payments for these small businesses, both through Amex capabilities and by collaborating with partners like Airbase,” said Dean Henry, executive vice president of global commercial services at American Express. “Launching our pilot with Airbase, we are providing our customers with a simple, all-in-one, automated expense management tool.”

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