Toronto-based corporate card and expense management technology startup Float has rolled out a new foreign exchange (FX) product aimed at helping its business clients convert between currencies more easily and cost effectively as they contend with the fallout from the Canada-United States (US) trade war.
“In moments of weakness, saving money becomes really important.”
Float FX will allow Canadian companies using the startup’s business finance software platform to convert funds from CAD to USD and vice versa for a 0.25-percent fee. This is a 90-percent discount compared to some of the major Canadian banks, which can charge approximately 2.5 percent for currency exchange.
In an interview with BetaKit, Float chief financial services officer Andrew Dale said that while moving into FX was always part of Float’s roadmap, the company decided to prioritize the launch of Float FX in response to feedback from customers facing financial strain due to increased currency volatility and rising cross-border costs amid trade tensions.
“What we’ve been hearing from Canadian businesses is, ‘Allow us to save money on US dollar-related stuff faster and sooner,’” Dale said.
Founded in 2019, Float aims to simplify spending for Canadian companies. The startup’s flagship business finance platform combines corporate cards with spending management software, giving finance teams real-time visibility into business spending as well as the capacity to spend, track, approve, and reconcile expenses.
Float caters largely to small and medium-sized businesses (SMBs) left underserved by banks and legacy solutions. Today, the startup serves over 4,000 Canadian companies, including Ada, Clutch, Cohere, Knix, and Jane App.
RELATED: Float raises $70-million Series B led by Goldman Sachs
Earlier this year, Float closed $70 million CAD in Series B funding led by Goldman Sachs to broaden its suite of products and financial services for Canadian businesses. This round came less than 12 months after the startup secured a $50-million credit facility from Silicon Valley Bank to grow its corporate credit offering.
“We’ve launched products that help our customers access more capital, access credit, streamline and automate their financial operations, [and] pay different types of bills on Float,” Float co-founder and CEO Rob Khazzam told BetaKit. “FX is a really unique opportunity now to offer them something through Float that puts more money in their pocket.”
Float claims it is able to offer such low FX rates in-house thanks to the size of its customer base compared to other FinTech startups and the fact that it is a registered money services business, which means it does not need to pay for a third-party FX provider. Dale said that Float’s scale, which includes a large amount of customers spending and loading both Canadian and US dollars in Float, enables the startup to match those currencies to each other for FX purposes.
Dale noted that the Canadian dollar has been weak compared to the US dollar lately thanks to tariffs and uncertainty, adding that, “In moments of weakness, saving money becomes really important.”
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Float’s February survey of 400 Canadian SMBs found that 65 percent expect to be impacted by US tariffs. Companies surveyed expressed the greatest concern about increased costs when exporting to the US, currency fluctuations, and higher prices from US suppliers.
Float FX is part of a broader package of products that the startup has been developing to help Canadian businesses with any degree of US operations save some cash and protect their margins “at a time when every dollar counts.”
This includes Float’s flagship high-yield account product as well as the abilities to manage USD and CAD balances without a US-domiciled account, issue USD cards, pay US vendors via wire or ACH (a type of electronic bank-to-bank payment used in the US), and reimburse US employees within Float.
“We’re launching [these capabilities] sooner than we had expected, and part of that is a real recognition at Float that this is a unique window right now,” Khazzam said.
Feature image courtesy Float.