The European economy is on shaky ground, but there’s an upside for startups: Those tools that create tools to help businesses run their finances in a more stable and predictable way are seeing a boost.
In the latest development, AccountsIQ, an accounting technology company founded in Dublin, has raised €60 million (about $65 million) to build “the finance function of the future” for mid-sized companies: cloud-based, automated services enhanced with AI to help accounting departments work faster and smarter.
AccountsIQ, which has been in business (mostly bootstrapped) for almost 20 years, was founded by accountants who saw an opportunity to build the tools they wanted themselves. As you would expect from this pedigree, they were fiscally prudent when it came to development.
By this fundraiser, with just €12.7 million in external funding, AccountsIQ had acquired around 1,000 customers, covering 10,000 “entities” (multiple functions for individual businesses) and 20,000 users. The company’s CAGR has remained at a steady 30% annually for the past several years, COO 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), digital tax services and reporting. It also integrates with a wide range of third-party services and has APIs to work with other platforms, all delivered via SaaS subscription starting at around $250 per user, per month.
The platform is hosted on Azure, and Cran said it’s leveraging Microsoft’s AI tools as well as building customizations internally to deliver the next generation of services, which will include more robotic process automation and AI-based features to speed up how the users of the job.
“We are ready to take the AccountsIQ product and service to the next level,” said Tony Connolly, founder and CEO of AccountsIQ, in a statement. “This investment comes at a perfect inflection point for our offering to enable us to leverage AI tools into practical, easy-to-use services for our user base. to make finance teams’ roles more flexible, valuable, less repetitive and even more interesting.”
The funding is a notable amount not only because it’s nearly five times more than AccountsIQ has ever raised before, but because startups, in general, still struggle to raise money the way they would several years ago, especially in its home market of the startup.
ONE recent report by the Irish Venture Capital Association found that startup funding in Ireland in the first quarter of this year was down 48% compared to a year ago.
But a regular pattern of bear markets has always been the staying power of solutions that simply help companies do their jobs better and more efficiently. So the accounting startup continues to garner 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 of Axiom Equity, said in a statement.
For comparison, PennyLane, another accounting startup that focuses on the SMB market, raised $40 million at a valuation of more than $1 billion a few months ago. It now has about 120,000 users. AccountsIQ and its lead investor for this round, Axiom Equity, did not disclose its valuation.
This is one potential competitor, although AccountsIQ would argue that PennyLane and others like it are looking to replace some of the incumbents that sell to smaller businesses, such as Xero, QuickBooks and Sage. Instead, Cran said AccountsIQ is being positioned as the platform that businesses will move to as they scale.
“We really offer an olive branch for business,” he said. “When they get older and a CFO or a CFO comes along, they usually realize they need to scale the business and to do that, they need to be in a new system.”
Competitors to AccountsIQ include Sage Intacct, Netsuite and Acumatica, he said.
