Pennylane, a French company, has secured 57 million (€50 million) in a Series B round from previous backers Sequoia Capital, Global Founders Capital, and Partech. In France — and across Europe — the firm hopes to replace traditional accounting systems.
Unless you’re an accountant, you’re probably already acquainted with Cegid and Sage. Pennylane essentially aims to rebuild these products and update accounting companies’ IT stacks.
Pennylane establishes direct connections with third-party services that store vital data. For example, the Pennylane interface allows you to see banking statements, Dropbox receipts, and Stripe billing information.
Accounting businesses may utilize Pennylane jointly since it’s an online platform. Clients may use the platform to organize receipts, generate invoices, and automate various processes. Clients and accounting firms may connect directly on the platform rather than passing information back and forth through spreadsheets and picture attachments.
Pennylane is now being used by 300 accounting companies. Some have begun utilizing the software with a few customers, while others have made the whole conversion to the new tool. Since Pennylane customers want to keep using the platform, they’re bringing new customers to it.
“Nine months ago, 90% of our customers contacted us directly, and 10% came via accounting companies. That tendency has shifted nine months later. Accounting companies account for 81 percent of our clientele, according to Arthur Waller, co-founder and CEO.
While the company declined to provide sales figures, Waller informed me that the company has been increasing at a rate of 20% month over month since this summer. Pennylane has raised 96 million since 2020.
Pennylane has a large market potential ahead of it if you take a step back. Companies in the United Kingdom, the United States, and other mature markets have been adopting QuickBooks, Xero, and other software-as-a-service solutions. Accounting, on the other hand, is a fragmented sector, with each nation using its own software system. There is no definite SaaS accounting solution in certain countries, such as France.
“In France, there are roughly 12,000 accounting firms. Today we work with 300,” Waller said. “Our goal is that in 4 or 5 years we work with 1.5 million small and medium companies,” he continued.
There are a few prospects for global development ahead, as well as some product opportunities. Pennylane has the potential to become a one-stop-shop for all things financial.
For example, in order to ease payments, the firm has begun beta-testing corporate cards with Swan. For the interchange fees earned by such corporate cards, you might conceive a revenue-sharing arrangement with accounting companies. The firm believes that with today’s investment, it will be able to iterate on its product since there is still a lot of work to be done simply for the French market.
By the end of the year, the firm hopes to have 500 workers. Because Pennylane believes that technology and product will continue to be the most essential aspects of the company, the majority of new recruits will be in these areas. Pennylanes’ goal is to produce a solution that is so simple to use that it is a no-brainer for novice accountants.