“Without the UK we’re not in business”, says the UK boss of Danish expense management unicorn Pleo.

Ben Swails, general manager of UK, Ireland and the Nordics, Pleo, spoke to Tech.eu as Pleo reported its financial figures for 2023.

Top line figures show that revenues across Pleo came in at £64m in 2023, up from £42m the year before.

Losses were £44m in 2023, compared to losses of £61m in 2022.

The losses were attributed to product and platform investment, and “growth plans and budgets”.

Like other fintechs, Pleo wants to swing into profit, but this is unlikely to be in 2024.

The financial statement says in 2024, Pleo expects to make a loss in the range of between £37m and 45m.

Swails (an American, who is speaking to Tech.eu from Kentucky but is in the UK “quite frequently”), says the UK, where Pleo has around 120 staff, is “hand’s down” Pleo’s biggest market.

UK key Pleo market

The UK, where it has a London office, accounts for around 40 per cent of its revenues and around 43 per cent of business spend on the Pleo platform.

Swails says:

“We are seeing extensive growth in the UK and continued opportunity there.”

Pleo, co-founded by Jeppe Rindom and Niccolo Perra, who met at Tradeshift, the Danish supply chain fintech, is something of a Danish fintech darling,

Ordained as Denmark’s eighth unicorn in 2021, when a $150m raise gave it a valuation of $1.7bn, six months later it raised another $200m at a valuation of $4.7bn, making it one of the more valuable fintech startups in Europe.

Since those heady days, amid a correction in the market, Pleo’s valuation has shrunk, according to one investor.

In the first quarter of 2024, Pleo was estimated to be valued at around $2.3bn by Kinnevik, which holds a 14 per cent stake in Pleo.

Today, the spend management platform is still a big hit with FDs and CFOs and is spreading its tentacles, both geographically and to new revenue streams.

Facing challenges

That said, it is facing challenges, not least in the UK where Swails points to figures showing that one in four UK businesses are looking to cut spend while interest rate rises across Europe are impacting business spend.

Pleo employs around 1,000 people, with Denmark, the UK and Germany among its core seven European markets.

Recent new European markets it has entered include France and Austria.

On how it is faring in its news markets, Swails says it is “going well” but adds “I think it’s important to acknowledge the fact that we are in a pretty difficult macro economic climate”.

Pleo, whose investors include Coatue Management, Alkeon and Bain Capital Ventures and which has raised around $470m in debt and equity funding, has also recently got a toehold in the US market too.

Pleo is an expenses management platform, a next-gen tech which allows SMEs to better manage employee spend by auto-submitting expenses.

It is a zippier alternative for businesses than the cumbersome expense reporting of yesteryear, where individuals could spend hours every month inputting expenses.

Pleo sweet spot

Its sweet spot is SMEs, which can be as small as just a few employees, and up to 5,000 employees.

According to its annual report, it has over 33,000 business customers, somewhat short of Rindom’s ambition to snare one million users by 2025.

Beyond expense management, it also offers invoice payments, vendor cards, so businesses can categorise recurring payments, all with the aim of easing the money management process.

Pleo, which has 10 offices in Europe, Canada and India, has also moved into credit and last year bagged a €40 million debt financing facility from HSBC Innovation Banking to enhance its credit facilities.

Swails said:

“I think it is almost a necessity that our customers expect.

“They don’t want to have to worry about if cash flow is tight one month, they don’t want to worry that their digital wallet with Pleo is going to run empty.”

On its soft US launch, where Pleo has a card partner, Swails stressed Pleo’s focus remains on Europe, not the US, and there is no official launch planned as of yet for the US.

He said:

“The reality is that we are a global economy. A lot of these customers have employees in the US.

“It would make no sense at all for us to set them up with a really great solution in Europe, but not to be able to extend that feature set to a US base employee.”

On the one hand, Pleo has new markets to attack and, on the other hand, more mature markets, like the UK, where it will look to sell its new products.

Pleo restructure

Like other fintechs, under deteriorating economic conditions, Pleo has restructured: in 2022, it axed around 10 per cent of its staff to between 900 and 1,000 staff.

Meanwhile, at the behest of its new CFO Søren Westh Lonning, the fintech is also reviewing some of its operations, as it looks to take costs out of the business.

He says:

“Our CFO is coming in and saying ‘no, we need to spend responsibly, we need to see clear ROI on everything and we need to have better control.’”

He adds:

“The reality is if we are going to be a profitable business we can’t just spend that money like it’s going out of style.

“We have really done a big scrub within the company. We need to be a bit more responsible.”

Examples of belt-tightening include a review of travel expenses (although Swails jokes “I probably have the biggest travel budget in the company, just because I am the one flying across the ocean most frequently”).

Pleo has also assessed its business subscriptions: for example, reviewing whether its sales teams need to use the manifold sales tools, such as forecasting assistants and commissions trackers and other SaaS technologies.

The belt-tightening does not extend to a recruitment freeze, adds Swails.

On AI, like others, Pleo is assessing and scrutinising how it can be used effectively at Pleo.

“Are we going to be an AI-first company? he asks. “Probably not.”

Economic optimism

While Pleo, like rivals, is facing economic challenges, there are signs of optimism in the economy, the general manager can point to.

Swails highlights recent figures showing an increase in business travel, a boon to Pleo’s tie-up with TravelPerk, the travel management firm, with the pair bringing a simplified travel expense experience to its users.

Entry into new markets and upselling in its current markets will present more opportunities for Pleo, which is also boosted by its brand equity in the market.