The European economy is in turmoil, but one good thing for enterprise startups is that those building tools to help businesses run their finances in a more stable and predictable way are getting a boost.
In the latest developments, AccountsIQThe Dublin-founded accounting technology company has raised €60 million (about $65 million) to build the “future of finance work” for mid-sized companies: cloud-based, automated services backed by AI to help accounting departments work faster and more intelligently.
AccountsIQ, which has been in business for nearly 20 years (mostly bootstrapped), was founded by accountants who saw an opportunity to build the tools they needed. As you might expect from that pedigree, they’ve been financially prudent when it comes to growth.
Prior to this fundraise, with just 12.7 million euros in external funding, AccountsIQ had acquired about 1,000 customers, comprising 10,000 “entities” (multiple operations for single businesses) and 20,000 users. COO Darren Crane said in an interview that the company’s CAGR has been stable at 30% annually for the past several years.
The company offers a range of digital accounting services (including accounts receivable and payable services, banking, business intelligence, forecasting and budgeting), digital tax services, and reporting. It also integrates with a wide range of third-party services, and has an API to work with other platforms, all delivered through a single SaaS Subscriptions Starting at around $250 per user, per month.
The platform is hosted on Azure, and Crane said it is leveraging Microsoft’s AI tools, as well as building in-house customizations, to deliver the next generation of services, which will include more robotic process automation and AI-based features to speed up the way users work.
“We are now ready to take the AccountsIQ product and service to the next level,” Tony Connolly, founder and CEO of AccountsIQ, said in a statement. “This investment comes at the perfect inflection point for our offering, allowing us to leverage AI tools into practical, easy-to-adopt services for our user base; making finance team roles more flexible, valuable, less repetitive and genuinely more interesting.”
The amount is notable, not only because it is nearly five times more than AccountsIQ has raised to date, but also because startups, on the whole, are still struggling to raise money just as they were several years ago, especially in this startup’s home market.
A recent report A survey by the Irish Venture Capital Association found that startup funding in Ireland fell by 48% in the first quarter of this year compared to a year earlier.
But recessions have always led to the adoption of solutions that help companies do their jobs better and more efficiently. Thus, this simple accounting startup has continued to attract people’s attention.
“Recognizing the potential to accelerate AccountsIQ’s product development with additional capital and expertise, we are excited to partner with them to take AIQ to the next level,” Martin Viagas, founding partner at Axiom Equity, said in a statement.
For comparison, Pennylane, another accounting startup that focuses on the SMB market, raised $40 million a few months ago at a valuation of over $1 billion. Approximately 120,000 usersAccountsIQ and its primary investor for this round, Axiom Equity, are not disclosing its valuation.
That’s a potential competitor, though AccountsIQ argues that PennyLane and others like it are looking to replace some of the existing companies in the market selling to small businesses, such as Xero, QuickBooks and Sage. In contrast, Krane said AccountsIQ positions itself as a platform on which businesses will move forward with their expansion.
“When they grow, and a financial controller or CFO comes in, they usually realize they need to grow the business, and to do that, they need to work on a new system.”
AccountsIQ’s competitors include companies such as Sage Intacct, NetSuite and Acumatica, he said.
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