Pennylane wants to overhaul the accounting tech stack in France – TechCrunch
French startup Pennylane has raised a $57 million (€50 million) funding round from existing investors, such as Sequoia Capital, Global Founders Capital and Partech. The startup wants to replace old accounting solutions in France – and in Europe.
If you’re an accountant, you may be familiar with tools like Cegid and Sage. Essentially, Pennylane wants to overhaul these tools and modernize the technology stack of accounting firms.
Pennylane connects directly to third-party services that hold valuable information. For example, you can get bank statements in the Pennylane interface, import receipts from Dropbox, and get billing information from Stripe.
And because it’s an online platform, accounting firms can use Pennylane collaboratively. Customers can also access the platform to centralize receipts, create invoices and automate certain tasks. Instead of sending information back and forth with spreadsheets and photo attachments, clients and accounting firms can interact directly on the platform.
Currently, 300 accounting firms use Pennylane. Some of them have started using the product with a few clients, others have completely switched to the new tool. Interestingly, Pennylane customers increasingly want to use the platform, which means they are bringing new customers to the platform.
“Nine months ago, 90% of our clients contacted us directly and 10% of them became clients through accounting firms. Nine months later, this trend has changed. 81% of our clients come from accounting firms,” co-founder and CEO Arthur Waller told me.
While the startup wouldn’t share revenue numbers, Waller told me the startup grew 20% month-over-month since this summer. Since 2020, Pennylane has raised $96 million.
If you take a step back, Pennylane has a significant market opportunity ahead. In the UK, US, and other more mature markets, businesses use QuickBooks, Xero, and other software-as-a-service solutions. But accounting is a fragmented industry, with each country using its own software solution. In some countries, like France, there is no definitive SaaS solution for accounting.
“In France, there are around 12,000 accounting firms. Today we work with 300 people,” Waller said. “Our goal is that in 4 or 5 years we are working with 1.5 million small and medium enterprises,” he added.
There are geographic expansion opportunities ahead, but also product opportunities. Pennylane could become the central hub for all things financial management.
For example, the company began beta testing corporate cards with Swan to facilitate payments. One could imagine some kind of revenue sharing agreement with accounting firms for the interchange fees generated by these corporate cards. With today’s fundraising, the company thinks it can iterate on its product because there is still a lot to do just for the French market.
The company plans to reach 500 employees by the end of the year. As Pennylane believes technology and product remain the most important areas for the startup, most hiring will be in these categories. Pennylanes basically wants to create a product that is a no-brainer for new, entry-level accountants.