The European economy is on shaky ground, but there is a silver lining for startups: those creating tools to help businesses manage their finances in a more stable and predictable way are seeing a boost.
In the latest development, IQ Accountsan accounting technology company founded in Dublin, has raised €60 million (around $65 million) to build “the finance function of the future” for midsize businesses: automated cloud-based services powered by AI to help accounting departments work faster. and more intelligently.
AccountsIQ, which has been in business (mostly independently) for almost 20 years, was founded by accountants who saw an opportunity to create the tools they themselves wanted. As you would expect from that pedigree, they have been fiscally prudent when it comes to growth.
Until this fundraising, with only €12.7 million of external funding, AccountsIQ had gained around 1,000 customers, covering 10,000 “entities” (multiple transactions for individual companies) and 20,000 users. The company’s CAGR has been a steady 30% annually for the past few years, Chief Operating Officer Darren Cran said in an interview.
The company offers a range of digital accounting services (including accounts receivable and payable, banking, business intelligence, forecasting and budgeting services), 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 SaaS Subscription starting at around $250 per user, per month.
The platform is hosted on Azure, and Cran said it is leveraging Microsoft’s AI tools and creating internal customizations to deliver the next generation of services, which will include more robotic process automation and AI-based features to speed up the operation of its users. work.
“We are now prepared 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 a 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 actually more interesting.”
The funding is a notable sum not only because it is almost five times more than AccountsIQ has raised before, but because startups, in general, are still struggling to raise money as they would have several years ago, especially in the local market. of this startup.
TO recent report of the Irish Venture Capital Association found that seed funding in Ireland in the first quarter of this year was down 48% compared to the previous year.
But a common reason for bear markets has always been the staying power of solutions that simply help businesses do their jobs better and more efficiently. Thus, the prosaic accounting startup continues to attract 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 Wygas, founding partner at Axiom Equity, said in a statement.
For comparison, PennyLane, another accounting startup focusing on the SMB market, raised $40 million at a valuation of over $1 billion a couple of months ago. now you have around 120,000 users. AccountsIQ and its lead investor for this round, Axiom Equity, do not disclose their valuation.
That’s a potential competitor, although AccountsIQ would argue that PennyLane and others like it are looking to replace some of the incumbents in the market that sell to smaller companies, such as Xero, QuickBooks and Sage. Instead, Cran said AccountsIQ is positioned as the platform that companies will move to as they grow.
“We really offer an olive branch to businesses,” he said. “When they grow and a financial controller or CFO comes along, they typically realize that they need to scale the business and to do that, they need to be in a new system.”
AccountsIQ’s competitors include companies such as Sage Intacct, Netsuite and Acumatica, he said.