From sperm freezing to accounting tools, Finaloop scores $35M to solve e-commerce retailers' bookkeeping headaches

by with No Comment Tech

Yellow Calculator On Purple Background; financial model to forecast fundraising

Image Credits: Javier Zayas Photography (opens in a new window) / Getty Images

For consumers, one of the big pluses of e-commerce is the convenience: You can shop anytime, from anywhere, and these days pay with a simple tap of your finger. Underneath that, however, is a mass of fragmentation and complexity, and it’s usually the retailers who take it on the nose. A startup called Finaloop is aiming to ease the burden for e-commerce businesses through its accounting software — and on the back of strong growth, it just raised $35 million in funding. 

Lightspeed Venture Partners is leading the Series A, which also includes participation from Vesey Ventures, Commerce Ventures, plus previous backers Accel and Aleph. Finaloop, which is based in New York but with roots and R&D in Tel Aviv, had previously raised $20 million. It’s not disclosing valuation. 

Finaloop CEO and founder Lioran Pinchevski is an accountant by training but an entrepreneur in his heart. Before starting the company, he worked for nearly a decade in senior roles at PwC, primarily on thorny accounting issues that arise in the process of mergers and acquisitions. On the side, he built startups. 

The last of them was a direct-to-consumer health tech startup focused on sperm freezing called Sppare.me, which he scaled to a “high seven figures” in sales, he said. The hard-won success is what gave Pinchevski the inspiration to tap his accounting expertise to start Finaloop, he added. 

E-commerce has exploded in the past few years, and it’s projected to pass $6 trillion in sales globally this year, says eMarketer. That’s thanks to evolving consumer buying habits and the ubiquity of smartphones and other screens — not to mention the growth of marketplaces like Amazon, social media platforms, and platforms like Shopify that make it easy to spin up online storefronts. 

Yet under the hood, retailers have a lot of work to do to run their businesses, and that is what Pinchevski found to be time-consuming and also afield from the skillset or interests that typically lead founders to start e-commerce businesses in the first place. 

“Every online seller needs to do accounting, both from a compliance perspective and a business visibility perspective,” he said. Typically, small e-commerce companies will either manage their own bookkeeping or work with a third party to carry this out. In both cases, the bookkeeping is usually done using software like QuickBooks or NetSuite or Xero and it can be complicated as e-commerce sellers use different channels to source, sell and distribute goods today. 

“But e-commerce founders can be very digital-first, young, dynamic people, so they hate it,” he said.

Finaloop’s solution is a platform that uses automation in the background to track transactions covering three different functions in one: the business ledger recording all transactions; the bookkeeping work to make sense of itemizing those transactions; and the inventory spreadsheets that are used not just to track what is being sold but to make projections for the future of what might be needed.

It integrates with a wide range of platforms that a company might be selling on — like Amazon, Walmart or even TikTok — or using for payments, shipping, or other services. And while numerous other accounting tools are available to smaller businesses, Pinchevski argues that Finaloop is the only startup that’s truly dedicated specifically to smaller e-commerce operations.

SaaS pricing starts at $65/month, which goes down per month for a yearly subscription or up if adding on its tax solution.

The growth of companies like Finaloop is notable in the context of the cycle of innovation we are seeing. 

While the frontiers continue to be pushed in areas like AI, quantum computing, and what might come tomorrow, there remains a steady beat of interest in solving more immediate problems for companies operating on today’s platforms.

At the same time, Finaloop has an opportunity to bring on more users because of another shift in tech. E-commerce rollups, funded with hundreds of millions of dollars, once promised smaller e-commerce better economies of scale if they sold up to them. This is the same highly fragmented market that Finaloop wants an opportunity to consolidate, as many of those rollups have struggled and disappeared. Finaloop potentially gives smaller e-commerce companies another route to existing on their own as independent businesses. 

It’s showing some signs of success. According to Pinchevski, Finaloop grew its customer base by 400% in the last year, working out to $13 billion of GMV managed on its platform across thousands of customers. The numbers apparently helped seal the deal on this funding round. 

From sperm freezing to accounting tools, Finaloop scores $35M to solve e-commerce retailers' bookkeeping headaches

by with No Comment Tech

Yellow Calculator On Purple Background; financial model to forecast fundraising

Image Credits: Javier Zayas Photography (opens in a new window) / Getty Images

For consumers, one of the big pluses of e-commerce is the convenience: You can shop anytime, from anywhere, and these days pay with a simple tap of your finger. Underneath that, however, is a mass of fragmentation and complexity, and it’s usually the retailers who take it on the nose. A startup called Finaloop is aiming to ease the burden for e-commerce businesses through its accounting software — and on the back of strong growth, it just raised $35 million in funding. 

Lightspeed Venture Partners is leading the Series A, which also includes participation from Vesey Ventures, Commerce Ventures, plus previous backers Accel and Aleph. Finaloop, which is based in New York but with roots and R&D in Tel Aviv, had previously raised $20 million. It’s not disclosing valuation. 

Finaloop CEO and founder Lioran Pinchevski is an accountant by training but an entrepreneur in his heart. Before starting the company, he worked for nearly a decade in senior roles at PwC, primarily on thorny accounting issues that arise in the process of mergers and acquisitions. On the side, he built startups. 

The last of them was a direct-to-consumer health tech startup focused on sperm freezing called Sppare.me, which he scaled to a “high seven figures” in sales, he said. The hard-won success is what gave Pinchevski the inspiration to tap his accounting expertise to start Finaloop, he added. 

E-commerce has exploded in the past few years, and it’s projected to pass $6 trillion in sales globally this year, says eMarketer. That’s thanks to evolving consumer buying habits and the ubiquity of smartphones and other screens — not to mention the growth of marketplaces like Amazon, social media platforms, and platforms like Shopify that make it easy to spin up online storefronts. 

Yet under the hood, retailers have a lot of work to do to run their businesses, and that is what Pinchevski found to be time-consuming and also afield from the skillset or interests that typically lead founders to start e-commerce businesses in the first place. 

“Every online seller needs to do accounting, both from a compliance perspective and a business visibility perspective,” he said. Typically, small e-commerce companies will either manage their own bookkeeping or work with a third party to carry this out. In both cases, the bookkeeping is usually done using software like QuickBooks or NetSuite or Xero and it can be complicated as e-commerce sellers use different channels to source, sell and distribute goods today. 

“But e-commerce founders can be very digital-first, young, dynamic people, so they hate it,” he said.

Finaloop’s solution is a platform that uses automation in the background to track transactions covering three different functions in one: the business ledger recording all transactions; the bookkeeping work to make sense of itemizing those transactions; and the inventory spreadsheets that are used not just to track what is being sold but to make projections for the future of what might be needed.

It integrates with a wide range of platforms that a company might be selling on — like Amazon, Walmart or even TikTok — or using for payments, shipping, or other services. And while numerous other accounting tools are available to smaller businesses, Pinchevski argues that Finaloop is the only startup that’s truly dedicated specifically to smaller e-commerce operations.

SaaS pricing starts at $65/month, which goes down per month for a yearly subscription or up if adding on its tax solution.

The growth of companies like Finaloop is notable in the context of the cycle of innovation we are seeing. 

While the frontiers continue to be pushed in areas like AI, quantum computing, and what might come tomorrow, there remains a steady beat of interest in solving more immediate problems for companies operating on today’s platforms.

At the same time, Finaloop has an opportunity to bring on more users because of another shift in tech. E-commerce rollups, funded with hundreds of millions of dollars, once promised smaller e-commerce better economies of scale if they sold up to them. This is the same highly fragmented market that Finaloop wants an opportunity to consolidate, as many of those rollups have struggled and disappeared. Finaloop potentially gives smaller e-commerce companies another route to existing on their own as independent businesses. 

It’s showing some signs of success. According to Pinchevski, Finaloop grew its customer base by 400% in the last year, working out to $13 billion of GMV managed on its platform across thousands of customers. The numbers apparently helped seal the deal on this funding round. 

From sperm freezing to accounting tools, Finaloop’s founder scores $35M to solve e-commerce retailers' bookkeeping headaches

by with No Comment Tech

Yellow Calculator On Purple Background; financial model to forecast fundraising

Image Credits: Javier Zayas Photography (opens in a new window) / Getty Images

For consumers, one of the big pluses of e-commerce is the convenience: You can shop anytime, from anywhere, and these days pay with a simple tap of your finger (and pay pretty much any way you want). Underneath that, however, is a mass of fragmentation and complexity, and it’s usually the retailers who take it on the nose. A startup called Finaloop is aiming to improve that for these e-commerce businesses — by way of their accounting software — and on the back of strong growth, it’s raised $35 million in funding. 

Lightspeed Venture Partners is leading the Series A, which also includes participation from Vesey Ventures, Commerce Ventures, plus previous backers Accel and Aleph. Finaloop, which is based in New York but with roots (and R&D) in Tel Aviv, had previously raised $20 million. It’s not disclosing valuation. 

Finaloop CEO and founder Lioran Pinchevski is an accountant by training but an entrepreneur in his heart. Before starting the company, he worked for nearly a decade in senior roles at PwC, primarily on thorny accounting issues that arise in the process of mergers and acquisitions. On the side, he built startups. 

The last of them was a direct-to-consumer health tech startup focused on sperm freezing called Sppare.me, which he scaled to a “high seven figures” in sales, he said. That was hard-won success:

It is what gave Pinchevski the inspiration to tap his accounting expertise to start Finaloop. 

E-commerce has exploded in the past few years, and it’s projected to pass $6 trillion in sales globally this year, says eMarketer. That’s thanks to evolving consumer buying habits and the ubiquity of smartphones and other screens and because of the growth of marketplaces like Amazon, social media platforms and platforms like Shopify that make it easy to spin up online storefronts. 

Yet under the hood, retailers have a lot of work to do to run their businesses, and that is what Pinchevski found to be onerously time-consuming and not really tapping the same skillset or interests that led them to become e-commerce founders in the first place. 

“Every online seller needs to do accounting, both from a compliance perspective and a business visibility perspective,” he said. Typically, small e-commerce companies will either manage their own bookkeeping or work with a third party to carry this out. In both cases, the bookkeeping would be done using software like QuickBooks or NetSuite or Xero and potentially be very complicated, not least because e-commerce sellers are using a number of different channels to source, sell and distribute goods today. 

“But e-commerce founders can be very digital-first, young, dynamic people, so they hate it,” he said.

Finaloop’s solution is a platform that uses automation in the background to track transactions covering three different functions in one: the business ledger recording all transactions; the bookkeeping work to make sense of itemizing those transactions; and the inventory spreadsheets that are used not just to track what is being sold but to make projections for the future of what might be needed.

It integrates with a wide range of platforms that a company might be selling on — like Amazon, Walmart or even TikTok — or using for payments, shipping or other services. While there are indeed a number of accounting tools available to smaller businesses today, Pinchevski said that this is the only one that is dedicated specifically to smaller e-commerce operations, which covers the whole span of their accounting and bookkeeping needs.

SaaS pricing starts at $65/month, which goes down per month for a yearly subscription or up if adding on its tax solution.

The growth of companies like Finaloop is notable in the context of the cycle of innovation we are seeing. 

While the frontiers continue to be pushed in areas like AI, quantum computing and food tech and what might come tomorrow, there remains a steady beat of interest in solving much more immediate problems for companies operating on the platforms of today.

At the same time, Finaloop has an opportunity to bring on more users because of another shift in tech. E-commerce rollups, funded with hundreds of millions of dollars, once promised smaller e-commerce better economies of scale if they sold up to them. This is the same highly fragmented market that Finaloop wants an opportunity to consolidate, as many of those rollups have struggled and disappeared. Finaloop potentially gives smaller e-commerce companies another route to existing on their own as independent businesses. 

It’s showing some signs of success, growing its customer base by 400% in the last year, working out to $13 billion of GMV managed on its platform across thousands of customers. The numbers will have helped seal the deal on this funding round. 

“Finaloop is shaking up an industry that hasn’t seen material change in over 30 years. They are at the forefront of reshaping accounting and bookkeeping for e-commerce by solving their biggest pain points,” said Lightspeed partner Tal Morgenstern in a statement. “We’re excited to support the Finaloop team with their goal of providing e-commerce companies real-time financials, giving them an invaluable edge over their competitors.”

Accounting software startup Pennylane becomes France’s latest unicorn

by with No Comment Tech

Image Credits: Pennylane

Just like clockwork, Pennylane is raising another €40 million ($43 million at today’s exchange rate). This new funding round comes after the accounting startup raised €4 million in 2020, €15 million in 2021, another €15 million in 2021 again, €50 million in 2022 and €30 million in 2023.

You might think that it’s quite a lot of money for a company working on . . . accounting software? That’s because the startup is growing nicely with more than 2,000 accounting firms now using Pennylane as their main software tool.

Some companies with in-house accountants also use Pennylane directly, but the vast majority of the company’s clients come from these accounting firms. Overall, it means that 120,000 small and medium companies rely on Pennylane for their accounting needs in France.

Over the last two years, Pennylane’s user base of SMEs has increased by 40x. You don’t see that kind of growth rate that often — even for a startup.

“We have a glass ceiling, which is ERP software. We’re not going to replace SAP. However, under SAP, we are a very good alternative as an accounting and finance tool for SMEs. Today, we work with companies with a bit more than a thousand employees,” Pennylane co-founder and CEO Arthur Waller told me.

With today’s funding round, existing investors Sequoia Capital and DST Global are increasing their stake in the startup. And Pennylane has now reached unicorn status, meaning that it has reached a valuation of $1 billion or more.

In Pennylane’s case, this is a valuation of “just over a billion euros,” Waller said. “It roughly doubles the valuation of the last fundraising,” he added.

One app to run your business finances

In addition to Pennylane’s unique distribution strategy, the company has been adding new features at a rapid pace. As a modern SaaS product, it connects directly with third-party services that hold valuable information. For instance, you can get banking statements in the Pennylane interface, import receipts from Dropbox and get billing information from Stripe.

Combined with in-house OCR technology, Pennylane can save time when it comes to entering data into the accounting platform. Pennylane has also added fintech products with professional banking and payment cards integrated directly in the platform.

You don’t need to use Pennylane as your bank account, but you can — 20% of Pennylane’s customers have a bank account with the company. And because other fintech companies like Qonto are ramping up their financial and accounting management features, it’s important to provide an all-in-one accounting and finance product.

Arguably, Pennylane wants to become Qonto before Qonto becomes Pennylane. Of course, Pennylane and Qonto both have integrations with the other service so that users can sign up to both services and seamlessly use both. “But when you run a restaurant, you prefer to have everything in one place. You prefer to have one software subscription,” Waller said.

And because both business owners and accounting firms have access to the same platform, everything stays in sync. Pennylane also handles billing, purchase orders, paying suppliers, accounts payable, etc.

Finally, Pennylane is also playing around with artificial intelligence in two different ways: finding relevant information in accounting data and helping accountants when it comes to following accounting rules for the most complex edge cases — a sort of accounting copilot.

While Pennylane doesn’t have any money issue, it still hopes it can become profitable within the next 12 to 18 months. And if there’s one thing that Pennylane must be good at, it’s tracking the startup’s financial situation.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

by with No Comment Tech

Ember founders

Image Credits: Ember

A few years ago, you couldn’t go to a fintech meetup without ending up in a conversation about embedded finance. In 2020, we even wrote that embedded finance might represent fintech’s future.

The distribution strategy lets fintech companies integrate their services into other products and services, which in turn gives users access to new features without having to sign up to a new service. It’s proven an especially attractive approach for fintechs as it gives them a new layer of products to offer to bigger banks and financial services providers.

Ember, a British startup working on an embedded tax offering, is proving that the strategy is still a valid one in 2024. The small company has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts. Ember could potentially gain thousands of customers with a single partnership.

Ember’s service fetches companies’ recent banking transactions and automatically categorizes them. After that, customers can track expenses, add receipts, create invoices and do basic accounting.

Ember then provides an overview of your company’s revenue and expenditures, estimates how much you’re going to pay in taxes and tells you how much money is available to withdraw as dividends for the owners.

Image Credits: Ember

Bigger companies will likely work with chartered accountants directly or even hire in-house accountants. But freelancers and small companies with less than 10 employees could at least simplify their accounting processes with Ember’s self-serve product.

“The likes of Xero, QuickBooks, FreeAgent are all built for accountants and not end business owners. And we saw a huge opportunity to build a transformative experience for an end business owner to look after their entire suite of tax obligations,” Ember’s co-founder and COO, Daniel Hogan, told TechCrunch.

However, the issue is that this market is extremely fragmented. There are hundreds of thousands of small companies in the U.K. alone, meaning that it’s hard to get customers.

“We were going up against the likes of Xero and QuickBooks on advertising spend, and that was tricky to acquire customers directly because of that exact reason — it was expensive,” Hogan said.

That’s why Ember has started negotiating with big banks like HSBC UK to offer an embedded solution. If customers want to access more features, such as calculating VAT returns from the platform, they can pay Ember to do that.

Ember also has a team of in-house accountants who can take care of complex tasks for paid customers, such as end-of-year annual accounting and corporation tax management. Ember’s free-to-use version that you get on HSBC’s online banking portal acts as the top of the funnel for the startup to acquire paying clients.

Ember isn’t going to work exclusively with HSBC going forward. Contracts with big banks take a long time to negotiate, but hopefully the company will have another partner bank to announce soon.

With upcoming regulatory changes in the U.K. (“making tax digital”), accounting software will likely receive increased interest from small businesses. By 2026, around 1.75 million business owners in the country will have to change the way they file their taxes. The vast majority of them don’t use any accounting service to help them with this process.

“[HM Revenue and Customs] has essentially made the decision to be an API-first organization. So rather than building it themselves, they’re relying on the software providers, such as ourselves, to actually build all of that experience. They’re just being the API layer,” Hogan said.

“They’re relying on us to build better user experiences to help customers report both more frequently as well as more accurately.”

In addition to this initial partnership with HSBC, the regulatory opportunity is also part of the reason why Ember recently raised a £5 million funding round ($6.3 million at today’s exchange rate) from Valar Ventures, Viola Fintech and Shapers.