Presenting our portfolio: DiviPay

Nov 11, 2020
SeedSpace Team

Seed Space investee DiviPay is an all-in-one spend management tool that helps Australian SMEs instantly issue virtual corporate cards, control spending and automate their expense reporting. DiviPay comes with everything you’ll need to streamline and control company spending.

Never afraid to pivot

Like many successful startups, DiviPay started life as something completely different. Co-founder Daniel Kniaz says that never being afraid to pivot and start again has been a core competency that’s delivered his company’s success today.

“My co-founder Russell Martin and I met working at a Big Four bank. His background is in technology, he’s ex Atlassian and IBM, and I have always been on the consulting side. We were working in the innovation sector of the bank, but ultimately no matter how many cool ideas we worked on, we could never jump the hurdle that lies between creating customer value and creating shareholder value. It’s a common story, but in our case it drove us out to start DiviPay.”

The company started life as a group payments solution for peers to use virtual credit cards to facilitate ‘joint bank accounts’ for everything to splitting the bill at dinner to divvying up share-house expenses.

“What we found though was while users liked the cards, they weren’t actually using them for their intended purpose,” Kniaz says. “Instead, they were creating virtual cards to protect their privacy and security while shopping online. Given 50% of Australians have or will be defrauded every year, it’s not really a surprise that people discovered this capability on their own. As a result though, we pivoted, rebuilt the platform and rebranded as a single-use card for security purposes.”

That first pivot went well — people liked it and it scaled quickly to over 2,000 users. However, the economics weren’t there to keep the business sustainable, so DiviPay had to pivot again. And again, it was the users who told them where to go next.

“We had lots of users saying they loved the product and wished they could apply it to their businesses. So we dove into that problem space, and what we found was that it’s very difficult for small to medium enterprises (SMEs) to get access to traditional corporate credit cards. So they make up their own workarounds — some of which are pretty scary!

We found one customer who had photocopied their personal credit card and had given copies out to their 30 employees! Plenty pass one or two corporate cards around the office, and lots of companies have to rely on staff to use their personal cards, which then leaves them open to interest charges as well as having to waste time filling out expense reports and carrying around a bunch of receipts. So there really wasn’t a solution that worked. And that’s how DiviPay as it is today was born.”

From proof of concept to launch

DiviPay’s business product started in 2019. Kniaz and Martin started drumming up customers while the product was still in concept stage, and the demand was very hot right from the start.

“We actually went out and sold the product essentially with just a Powerpoint deck. The fact we were able to get customer commitments without a working product at first meant we were on to something. Customer’s got so desperate for the tool they would constantly call us and ask when would the product finally launch."

Any business that has employees who need to spend money to get their job done is a potential DiviPay customer. “We have tradies with two people all the way up to companies with 500 people,” Kniaz says. “It really does scale, and all of our new business is through referrals, so people are really liking the product and telling their friends and colleagues about it.”

DiviPay brings to small and medium businesses the CFO-style ability to budget like big companies. Companies can allocate spending to particular budget lines and set very granular spending controls. Items like subscriptions are particularly difficult to manage — businesses will often have multiple subscription accounts for various software tools and not even realise.

With DiviPay’s virtual cards, the business owner can allocate a card to any vendor, and set up a limited recurring budget, to ensure this type of expense is managed better. Subscription information remains with the company even when the employee who set it up leaves and because each subscription has a unique card, there’s no wholesale interruption when a single card expires.

“Our USP has become even more apparent during the pandemic when everyone is suddenly working from home,”

“The product is 100% virtual, so businesses have a centralised finance tool — in two clicks they get a card with watertight controls and a custom spend limit for every staff member. Team members can instantly access this card via the app and make payments for home office equipment, or whatever they need to get their job done. The instant virtual nature is the core of what makes it attractive, and the fraud protection is a big added bonus.” Kniaz says.

Kniaz says DiviPay will ideally become the financial control stack for SMEs, firstly in Australia and then beyond.

“We can offer every SME a transactional bank account, with workflow tools sitting on top that help them more easily manage money, and save time for the owners of the business. Layer that with the security benefits and we think we are on to a winner. Happily, our customers agree!”