It’s not the sexiest topic, but someone has to talk about it: The CFO technology stack — software used by the world’s CFOs — is ripe for disruption. This is according to Jonathan SaundersCEO and co-founder of the Danish startup Lightwhich comes out of stealth on Wednesday with $13 million in a funding round led by European VC giant Atomico.
The Copenhagen-based startup is re-engineering its general ledger software from the ground up, packed with artificial intelligence to clean transaction data, while also allowing funding teams to ask simple English questions and get immediate answers from their data.
The light relies on automated ledgers
With stints at the likes of investment bank Credit Suisse and SMB-focused spend management scale Pleo, Sanders has a reasonable insight into the working environment of the CFO’s office. Enterprise Resource Planning (ERP) software is king, the support package for CRM (customer relationship management), HR (human resources), project management, and perhaps the most critical element of all, the general ledger.
The general ledger is a comprehensive record of a company’s financial transactions, recording every dollar, dime, and dime that comes in and goes out. For the CFO, it is important to serve as a single source of truth into a company’s financial health. And it is this element of ERP that Light is focused on dragging into the modern digital age, where AI increasingly dominates.
“Our mission is to be the first automated ledger for global companies,” Sanders told TechCrunch. “We believe that CFOs and finance teams deserve the full benefits of AI, gaining the full knowledge and expertise of a large enterprise organization around accounting and tax, something they have been denied to date.”
Companies are integrating Light with their legacy CRM and HRM tools, their banks, and even their communication channels like Microsoft Teams and Slack. The ‘AI’ on the platform is a mix of models, each serving different purposes for the financial fraternity. This can be for handling manual tasks such as line item coding (ie assigning codes to individual transactions), processing correct tax codes and related bookkeeping tasks.
“We use one model to help keep all line items accounted for with correct taxes and accounts, and we use another model to help the C-suite ask questions about revenue, costs and profits — right from Slack” , Sanders said. “We have, and continue to experiment with, a combination of off-the-shelf and open-source models with precision as the AI landscape changes rapidly.”
By unbundling ERP, Light gives something of a middle finger to legacy applications like Oracle NetSuite, SAP ERP and Microsoft Dynamics, while also taking on “newer” newcomers like Quickbooks and Xero. The company is targeting “international multi-entity companies” with the promise of a unified dashboard for all their global transactions, with “complete search and search using artificial intelligence”.
It’s all a result of Sanders’ personal frustration with working with established ERP systems.
“I remember one time, I was working with the finance team on some report from the ERP system and it took more than 20 seconds for the page to load — I asked why the Wi-Fi was so slow,” Sanders said. “They said it wasn’t the Wi-Fi that was the problem, it was the product. I knew immediately that something had to be done.”
In addition, Sanders is also touting a sleeker “Apple-like” interface design that funding groups might not hate using.
The long and short of it is that instead of offering things like CRM, HR or project management, Light only serves functions like accounts receivable (AR), accounts payable (AP), bookkeeping, VAT reporting and more.
But why bother with decoupling in the first place?
While having a full-featured ERP makes sense for some businesses, for example where there needs to be close alignment between sales, supply chain and workforce data (eg in manufacturing), this is not the case for many (or even most) businesses today — businesses that already use stand-alone tools that have traditionally existed on an ERP platform.
“We chose to focus on the general ledger to create a clean and focused product — that’s the hardest and most important problem to solve for today’s finance teams,” Sanders said. “Modern companies use the best CRM, like Salesforce. and the best HR software, such as Workday or Factorial. But there is no global ledger that is decoupled from the ERP suite, so you are forced to implement a full-stack ERP with integrated CRM and HRM products that you never use.”
Sold as a subscription with volume-based pricing, Light also hopes to target a new generation of companies tired of legacy software with per-seat pricing that ultimately limits access to a select few within the company. So Light is pretty broad when it comes to identifying a target market — the only thing they might have in common is a desire to scale globally.
“The primary day-to-day users are the finance teams, including the CFO,” Sanders said. “Whether the company has 50 employees or 5,000, they can leverage Light for their global operations. We focused on making the interface with the rest of the business seamless so that anyone with the right permissions can easily approve invoices, raise expenses, and query vendor information or reports.”
Light work
After leaving his position as head of payments at Pleo in 2020, Sanders went on to found another fintech company called June, which develops tools to help e-commerce companies better manage their finances. That startup went on to raise north of $280 million, but Sanders left in 2022. He maintains there was nothing particularly harsh about his departure.
“We wanted to take the company in different directions – I remain a happy shareholder, cheering from the sidelines,” Sanders said.
And so in 2023, Sanders integrated Light, and although it has been operating in stealth for the past year, the platform is already technically live and available globally. The lion’s share of its current clients come from Scandinavia, including Worksome, Lenus, Family and Proxify — that’s something Sanders says positions his own company well to thrive.
“In the Nordic countries, as well as other smaller countries in Europe, companies have to be global from day one,” Sanders said. “This means that once you find commercial traction, you have to open legal entities in other countries and your financial backbone is broken. Our mission is to help these companies early in their journey to go global and free them from the burdens of existing legacy solutions.”
In addition to key backer Atomico, Light’s round also included participation from Cherry Ventures, Entrée Capital, Seedcamp and angels such as the German soccer player Mario Gotze.
