Digital credit card firm raises millions, partners with City National
The digital credit card distribution firm Extend hit fintech's version of a double on Wednesday, announcing $11 million in equity financing and a new bank partner.
With the New York firm's cards, employers can set unique spending limits, validity periods and other controls as well as track where purchases were made. Its platform is integrated into Mastercard and Visa.
Also, Extend's software is meant to help banks reduce fraud and increase transactions in commercial and consumer markets.
The Series A funding round was led by Point72 Ventures and Fintech Collective, with additional participation from Reciprocal Ventures and City National Bank in Los Angeles. Extend had previously raised $3 million in seed funding from Point72.
In addition to its new funding round, Extend also announced a partnership with City National Bank. The startup has five bank partnerships so far, including Silicon Valley Bank in Santa Clara, Calif.
With Extend's tech, employers can closely track spending from employees and subcontractors. Families with caretakers can set safeguards to avoid elder financial abuse. The cards will also encourage commercial customers to reduce their use of checks or cash to reimburse employees.
“Our entertainment clients lose their auditing trail with cash or check,” said Vince Hruska, senior vice president and director of enterprise cards at City National Bank. “We want their spend going through these cards, and Extend will give them more detailed reporting and categorize their transactions.”
The funding “validates our theory that you can build a platform in collaboration with networks and issuers,” said Andrew Jamison, CEO and co-founder of Extend. “Our go-to-market is collaborating with banks instead of running around banks.”
The startup also plans to launch new features for its mobile app, develop open application programming interfaces, and recruit more talent across engineering, marketing and operations.
Products like Extend have become more mainstream thanks to Apple and Goldman Sachs' new plans to offer a virtual card and other high-profile announcements, Jamison said.
“They’ve brought to Main Street the idea that a credit card will be delivered directly to a phone,” he said.