Pluto: Managing Expenses in the UAE
🌎 Issue #26
It’s Tuesday, and today we’re diving into Pluto, a UAE corporate card and expense management startup that raised $4.1 million in pre-Series A funding. Rhino Ventures, Born Capital, Goanna Capital, Evolution VC, Freesearch VC, and Tiferes VC were the investors in the round.
The Product
Companies manage business expenses in two ways. First, by distributing cash among employees. Second, by using a single corporate card for all expenses. In the first instance, it’s hard to keep track of all the cash. In the second, handing a card with the entire balance to individual employees is very risky. In both cases, accounting for all expenses is challenging.
Just a little over three years later, Pluto has expanded its offering much further. It now helps businesses streamline everything related to expenses: issuing corporate cards, managing invoices and procurement, handling petty cash, and dealing with reimbursements. All of this can be integrated with the client’s ERP or accounting software.
In a nutshell, Pluto makes running your finance operations easier and cheaper:
In a nutshell, Pluto makes running your finance operations easier and cheaper:
Tired of running after employees and collecting receipts? Enable your team to snap a photo of a receipt, send it to Pluto through WhatsApp, and let Pluto automatically extract all the relevant information.
Need to control expenses but don’t want everything tied to one card? Issue an unlimited number of corporate cards with controlled budgets and merchant category restrictions—and get a 2% cashback on top of it.
Lost in all the invoices? Automate notifications, data entry, approvals, and payments for your trusted vendors.
It’s very much following one of its investor Ramp’s playbooks. As another one of Pluto’s investors, Packy McCormick, mentioned in his article on Ramp, the platform provides its customers with:
Control over spending: Who, where, and how much is spent on certain items.
Visibility and predictability: How money is spent right now and what that means for the company’s future.
Process automation: Removing manual procedures, like entering invoices or approving spending.
Providing savings: Through the 2% cashback.
Now, Pluto’s vision goes beyond expense management. Its goal is to make it extremely easy for businesses to make payments and access financial services—two separate trillion-dollar industries.
The Business Model
Like Ramp, Pluto generates revenue through subscriptions and interchange fees:
Subscription. According to Mohammed Aziz, Pluto’s promise is that it will always remain a free product up to a certain number of employees. Currently, that number is 10. Above that, customers pay a subscription fee for every additional employee.
Interchange fees. Interchange fees occur when Pluto’s card is used. The merchant pays a fee for each transaction, which is divided among the issuing bank, card network, acquiring bank, and payment processor. Pluto takes a cut of the portion generated by its partner, the issuing bank.
Pluto also recently launched Pluto Connect—a solution that lets banks and financial institutions embed its corporate card and spend management tools into their own platforms. In partnership with one of the world’s largest banks, Pluto now serves over 30,000 SMEs through this offering.
While we don’t know the specifics of this partnership, it opens up a lot of opportunities for Pluto:
Pluto Connect may serve as an enterprise solution for banks with interchange fees as the monetization mechanism.
It can also earn a cut on every card issued by the bank.
The company may gain access to even more data on how its cards are used, which can help inform future product development.
The Local Angle
I’ve mentioned Ramp 17 times already and for good reason.
I saw this neat framework in Shaan Puri’s newsletter (look at that, another Pluto investor). And, although not gospel, according to this framework, Pluto—a Ramp “clone”— is a good idea.
When you think about it, it makes sense. Most customers around the world face the same fundamental challenges: what they want is either too expensive, hard to access, or difficult to use. If someone somewhere solved a problem and your potential customers face the same issue halfway across the world, why not solve it the same way? In that sense, Pluto is a clone.
But if there wasn’t local context enhancing Pluto’s offering, there wouldn’t be much point in writing about it in a newsletter on startup geography. Although it’s a relatively small market, the UAE (and the GCC as a whole in the future) presents incredible tailwinds for the business.
Small Business Boom: The UAE is known for its oil—and oil has traditionally been controlled by large corporations. While that may have been true historically, in recent years the UAE’s focus has shifted towards promoting small businesses. From 2020 to 2024, the number of businesses registered in the UAE skyrocketed from 405,000 to 1,021,000, a 152% increase. The government had a goal of reaching 1 million SMEs by 2030. But since 94% of businesses are SMEs, we can safely assume that they’ve essentially met that goal. This means that since Pluto started operations, its addressable market has doubled. With the government’s ambitious goals supported by programs like the National SME Program, there’s no reason to think that’s the end of the growth story.
Troubles with Expenses: 21% of employees and entrepreneurs don’t submit expenses regularly because the filing system at work is too complex—with 33% claiming that it takes them over an hour to manage expenses. Inefficient expense management results in roughly $3,500 of lost revenue per year for at least 35% of employees. This data was compiled by one of Pluto’s competitors. Even if it’s only half true, multiply that by the growing number of businesses, and you have a significant opportunity.
Epicenter of Digital and Global Payments: The UAE’s ambitions to lead in global development and innovation are well known, with both businesses and consumers embracing the vision—especially the push towards digital and global solutions. On both fronts, we see plenty of supporting data:
Pluto directly supports this drive by offering businesses seamless financial tools—including its card and free international payments to over 150 countries.
Localization Needs: Pluto is planning to expand beyond the UAE, with Saudi Arabia being first on the list—a market where one in five expense reports contain errors. The company is better positioned to execute that plan than outside competitors because it understands the need for localization:
Saudi Arabia is ranked 105 out of 116 in English proficiency, so an Arabic interface is a must.
There’s a need to integrate with the local payment ecosystem, including the Saudi Payment Network and mandatory e-Invoicing.
Preference for using smartphones to access the web is among the highest in the world at 61.4% of time spent, implying a strong need for a mobile-first user experience.
Future Potential: While 80% of SMEs feel optimistic about their future, 92% need access to a wider range of financial services, and 42% claim that insufficient access to credit limits their growth. Although it’s an incredibly competitive space, this signals potential for Pluto to realize its vision of simplifying access to financial services.
The Roadblocks
Emerging Competition: Since 2021, the UAE’s spend management industry has shifted from a blue ocean to a red ocean. Several competitors have emerged, including Pemo and Qashio—both of which raised more than Pluto at $19 million and $12.5 million respectively. Both position themselves as all-in-one solutions and target the entire region. Although this is probably not a winner-take-all market, strong competition with solid backing puts even more pressure on Pluto to execute.
Emerging FinTech Scene: I mentioned the 92% growth in fintech funding, which is generally a good sign—more solutions are finding product-market fit and more companies are open to adopting these innovations. However, businesses have limited bandwidth to consider implementing a new fintech product. From payments to spend management, from lending to digital banking, they all raise money, clamoring for CEOs’ and CFOs’ attention and spending heavily on ads. With so many companies vying for attention, each product must strengthen its offering even further.
Banking Partnerships: Pluto’s model relies on partnerships with banks and financial institutions to embed its services. These partnerships are largely controlled by banks, thanks to their established client relationships. Add increased competition on top of that, and banks can exert even more pressure on Pluto.
The Takeaway
This isn’t just about Pluto—it’s a general lesson on why entering a foreign market is hard. Everyone knows that managing business spending is tough. But recognizing that this or any other opportunity exists, is not the same as adapting to the specific circumstances of a local market.
Often, it’s easier and more beneficial in the long run to bet on a local player rather than trying to export your solution and adapt it to local needs. The “buy vs. build” dilemma in foreign market entry often seems like a concern only for large businesses. But it’s relevant for startups also. However startups that succeed in one market tend to overlook it, assuming they can replicate their success by building from scratch in a new country.