Fintech Archa has raised $61m to eliminate outdated habits such as employees charging work-related costs to personal cards instead of corporate ones, and to address an annual $1.3 bn productivity loss. The Melbourne-based firm attracted investment from well-known tech entrepreneurs and founders linked to Zip, The Iconic, BetaShares and Netspace, as well as U.S. venture partner The Fintech Fund and former Macquarie leaders.
Banking system at a standstill
Oliver Kidd, founder and CEO of Archa, and formerly a corporate lawyer and listed company secretary, believes major banks have neglected to update their corporate card services, resulting in lengthy approval times of three to five months for entrepreneurs. Despite NAB’s efforts to attract start-ups through a marketing campaign, Kidd argues that the bank’s size does not translate to efficiency or accessibility, with NAB holding an estimated 28% share of the small-to-medium enterprise market.
“A lot of those campaigns are saying quite aloud that ‘we’re Australia’s biggest business bank’. But it just means you’re probably the slowest and the hardest to deal with, and that is what we hear from customers every single day – it’s incredibly difficult to access this product,” Kidd said.
Accessing capital without personal risk
Archa’s recent deal includes an $11m equity raise and a $50m debt facility, specifically designed to eliminate personal guarantees and provide working capital to rapidly growing companies, without disclosing its valuation. This approach differs from traditional lending practices, where big banks often require SME directors to sign personal guarantees, which can limit their personal borrowing capacity and hinder their ability to refinance mortgages or purchase homes.
Archa is addressing a long-standing issue faced by Australian business owners, who often struggle to access corporate credit cards without putting up personal assets or taking on personal liability. According to Kidd, companies have resorted to “absurd” workarounds, such as issuing daily cash envelopes to travelling employees or requiring junior staff to pay expenses on personal debit cards and wait for reimbursement, which can take 30 to 60 days.
Archa’s research suggests that the administrative burden of manual expense claims and inaccessible credit results in a $1.3bn annual loss in productivity for the Australian economy, equivalent to 13,000 full-time positions. The company plans to use its capital injection to expand its AI capabilities, which can automatically enforce corporate spending policies, allowing finance teams to upload internal policy documents and flag non-compliant spending, such as unapproved alcohol purchases.
Funding Structure and Investor Support for Archa’s Expansion
The $61 million funding round for Archa includes an $11 million equity investment alongside a $50 million debt facility. This structure is intended to remove the need for personal guarantees, a common requirement from traditional lenders. The facility aims to provide immediate working capital to businesses experiencing rapid growth, addressing a key barrier for small and medium-sized enterprises.
The backing comes from established tech founders associated with companies such as Zip, The Iconic, and Netspace, as well as a U.S.-based venture firm specializing in fintech. Former executives from Macquarie have also contributed to the round, reinforcing Archa’s focus on financial innovation for corporate clients.
Taxation changes and future tools
Over the past 12 months, Archa has achieved 184% growth in annual recurring revenue and currently processes over $200m in annualised spend across thousands of Australian businesses, including Higgins and the Sydney Roosters. Kidd noted that 99% of Archa’s customers have transitioned from American Express or major banks, citing cumbersome onboarding and rigid terms as the reason for the switch, but emphasized that the company is not advocating for customers to abandon the big banks entirely.
“They’re coming from just an absurd process. They couldn’t access the product and didn’t want to spend the time going through the process with those parties. So the 99 per cent of our business comes across from those guys,” he said.
“We’re not asking our customers to close their debit accounts, shut down their bank account with the majors. Most Australian businesses don’t want to do that, and we’re not really interested in that business. We’re very interested in commercial credit card spending. We’re very interested in making finance teams operate more efficiently, and we’re very interested in helping them save money.”
“Certainly, our platform will allow our customers to still pay the ATO after December 1.”
