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In today’s episode, Andrew Janssens sits down with Peter Lord, CEO and Founder of Codat. Peter founded Codat, “the universal API for small business” in 2017 after working at Market Finance, a UK-based SMB lender.
Codat connects small businesses’ consented data from banking, accounting and commerce platforms to fintechs and financial institutions. In June 2022, Codat raised a $100M Series C from investors including: JP Morgan, PayPal, Shopify and Plaid. Their other investors include: Canapi Ventures Tiger Global, Index Ventures, AmEx Ventures, and more.
Prior to working at an SMB lender, Peter studied Computer Science at the University of Southampton. After a stint and Credit Suisse, Pete joined Market Finance a UK-based SMB lender, where he met his Codat co-founders Alex and David.
In this content-packed episode, Andrew and Pete discuss:
- How Pete’s start in SMB lending led to founding Codat
“What that business did was to connect our platform to the systems that small businesses are using already to run their business that already contain the data that we need, and much more. And let’s get access to that via integration. And let’s make that data available to our investors. And so we’re talking bookkeeping, software, things like Xero, QuickBooks, Sage, NetSuite. And those were the integrations that I spent time as a software engineer building.
And when I moved into product, I was responsible for managing them and had a roadmap of all the other systems that we hadn’t built connected connectivity to yet that our small business customers were using. And that’s really when I saw the need for Codat.
I’d already seen the value for investors on the investment side and the peer-to-peer platform, seeing the value for the platform itself and the value for small businesses. And now I saw the value of providing that as a service for other companies.”
- What being “the universal API for small business” means to Codat
“You can unpack it. So universal for us: Think of us as a universal adapter. We have a standardized data model. So although we connect to many different platforms, code that has has one API, and that’s going to be the universal element.
An API: While we actually typically don’t sell to developers… the developers are the end users. And so having having API in that tagline really helps us to remember kind of who we’re building software for and how it’s going to be consumed.
And then small business. Our mission is to make life easier for small businesses. And that’s not only because there are 200 million of them and they make up 50% of the the world’s economy and there’s real people and families behind them. But it’s also a good business for Codat for us to put them front and center. We charge our clients by the number of small businesses that they have connected in any given month. And so if we keep small businesses in mind, if we think about the value that they’re getting out of our technology and how it’s used by our customers, then that’s good business for Codat.
- How Codat works in the background to enable SMB’s to take advantage of their own data
“They never see the Codat logo. They typical don’t know about Codat as a company. And it’s not Codat, they are authorizing to have access to their data, it’s a nominated third party, our clients.
I think what’s really important is that we, as Codat, we’re not reselling their data in any way, we’re actually allowing them to leverage it, by allowing them to leverage it in that first example, need to be able to get access to a to a product, that that makes sense for them, that is personalized for them that they might not be able to get access to, if the lender just uses the last 12 months last tax return, or you know, a credit score and gets put into a very broad bucket, especially for growing businesses, they actually be able to leverage your data allows you to get access to finance that you wouldn’t otherwise.
- Differences between the UK and US fintech scenes
“ We were founded in London, and out of six years I’ve spent four of them living here and two of them living in New York. And so I’ve got a bit of a taste as to kind of what it’s like, on both sides of the Atlantic. Obviously this a huge generalization — but as, as Brits, we’re I guess, quite conservative, quite realistic, quite humble. And so in terms of building businesses, I think and again, huge generalization, but I think we kind of lacked some of the ambition that we see in the US, particularly, you know, in terms of the West Coast US.
That’s, that’s something that, from my time in the US, and from our US team, now, kind of we tried to, to capture at Codat. But on the flip side, British businesses, I think, that gets reflected in a focus on growth, well, more of a focus on kind of unit economics on the path to profitability. You know, being able to, you know, I guess just just run a more, slightly more conservative business, and, and perhaps probably more conservative ambition as part of that. And to kind of sequence growth, rather than to kind of go go all at once.
And I think this, this approach has probably been kind of against the grain of the last few years, but is now much more in vogue as kind of VC funding market has changed somewhat, that’s probably like the biggest, the biggest difference that I’ve seen, could have been from on both sides of the pond, so to speak.”
- Growing a multinational company
- Codat’s 42 (and counting) use cases
- and a whole lot more!
Check out the Episode on the platform of your choice here: Spotify | Soundcloud | Apple Podcasts
About Peter Lord
Peter Lord is the co-founder and CEO of Codat. He has a technical background, with a degree in Computer Science from Southampton University and previous experience in fintech. Peter has used this knowledge to help create a simple API that powers clients’ solutions to the real problems faced by small businesses.
About Codat
Codat is the universal API for small business data. Codat connect fintechs and financial institutions to the platforms their SME customers use — including accounting, banking, and commerce systems — to help them to build smarter, more integrated products
Codat simplifies accessing consented business data from customers’ banking, accounting, and commerce platforms. A single connection to their API allows customers to aggregate data, underwrite credit risk, and automate accounting for their small business customers.
About the Author
Andrew Janssens is a second-year MBA Candidate at The Wharton School, where he is part of the Wharton FinTech Podcast team. He has a passion for the nerdy corners of financial services, venture capital, and all things FinTech. Don’t hesitate to reach out with questions, comments, feedback, and opportunities at [email protected]
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