The economy remains on shaky ground in Europe, but there is some silver lining for enterprise startups: those building tools to help businesses run their finances in more steady and predictable ways are seeing a boost to their business.
In the latest development, AccountsIQ, a Dublin-founded accounting technology company that has been in business, and mostly bootstrapped, for nearly 20 years, has raised €60 million ($65 million) in funding to seize an opportunity to build “the finance function of the future” for mid-sized companies: cloud-based, automated services boosted by AI to help accounting departments work faster and more intelligently.
AccountsIQ was itself founded by accountants who saw an opportunity to build the tools that they themselves wanted to exist to do their jobs, and as you might expect from that pedigree, they have been fiscally prudent when it’s come to growth.
To date, on just €12.7 million of outside funding, AccountsIQ has grown to some 1,000 customers, covering 10,000 “entities” (multiple operations for single businesses) and 20,000 users, with the company’s CAGR sticking to a steady 30% annually for the last several years, COO Darren Cran said in an interview.
Its tools to date include a range of digital accounting services (including accounts receivable and payable services, banking, business intelligence, forecasting and budgeting), digital tax services, and reporting, with a wide range of third party services that can be integrated, and an API to integrate AccountsIQ into other platforms, all delivered on a SaaS model starting at around $250 per user per month.
The platform is hosted on Azure, and Cran said that it is leveraging Microsoft’s AI tooling, alongside building customizations in-house, to add on the next generation of services, which will include more robotic process automation but also more AI-based features to speed up how its users work.
“We are now poised 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 allow us leverage AI tools into practical, easy to adopt services for our user base; to make finance team roles more flexible, valuable, less repetitive and indeed more interesting.”
The funding is a notable sum not just because it’s nearly five times as much as AccountsIQ has ever raised before, but because it’s coming at a time when startups are, overall, still struggling to raise money as they would have several years ago, especially in this startup’s home market.
A recent report from the Irish Venture Capital Association found that startup funding in the first quarter of this year in Ireland was down by 48% on a year ago.
But even while buzzy AI startups, along with those that enable their existence, continue to grab most of the funding headlines these days, a regular motif of bear markets has always been the staying power of solutions that simply help companies do their work better and more efficiently. Thus, the prosaic accounting startup continues to get attention.
“Recognising the potential to accelerate AccountsIQ’s product development with additional capital and expertise, we are excited to be partnering with them to scale AIQ to the next level,” said Martin Wygas, founding partner of Axiom Equity, in a statement.
For a point of comparison, PennyLane, another accounting startup that focuses on the SMB market, raised $40 million round a valuation of over $1 billion a couple of months ago. It now has around 120,000 users. (AccountsIQ and its primary investor for this round, Axiom Equity, are not disclosing its valuation.)
That is one potential competitor, although AccountsIQ would argue that PennyLane and others like it are looking to replace some of the incumbents in the market selling to smaller businesses, such as Xero, QuickBooks and Sage. In contrast, Cran says that AccountsIQ positions itself as the platform that businesses will move to as they scale up.