AccountsIQ takes in $65M to boost bookkeeping with AI

The European economy is on shaky ground, but there is a silver lining for enterprise startups: Those building tools to help businesses run their finances in more steady and predictable ways are seeing a boost. 

In the latest development, AccountsIQ, a Dublin-founded accounting technology company, has raised €60 million (about $65 million) 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, which has been in business (mostly bootstrapped) for nearly 20 years, was founded by accountants who saw an opportunity to build the tools that they themselves wanted. As you might expect from that pedigree, they have been fiscally prudent when it comes to growth. 

Until this fundraise, with just €12.7 million of outside funding, AccountsIQ had gained some 1,000 customers, covering 10,000 “entities” (multiple operations for single businesses) and 20,000 users. The company’s CAGR has stuck to a steady 30% annually for the last several years, COO Darren Cran said in an interview.

The company offerss a range of digital accounting services (including accounts receivable and payable services, banking, business intelligence, forecasting and budgeting), digital tax services, and reporting. It also integrates with a wide range of third-party services, and has an API for working with other platforms, all delivered via a SaaS subscription starting at around $250 per user, per month. 

The platform is hosted on Azure, and Cran said it is leveraging Microsoft’s AI tools as well as building customizations in-house to offer the next generation of services, which will include more robotic process automation and 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 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 Ireland in the first quarter of this year had declined 48% compared to a year ago. 

But 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 comparison, PennyLane, another accounting startup that focuses on the SMB market, raised $40 million at 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 said AccountsIQ positions itself as the platform that businesses will move to as they scale up. 

“We really offer an olive branch for businesses,” he said. “When they grow, and a financial controller or a CFO comes along, they typically realise that they need to scale the business, and that in order to do that, they need to be on a new system.”

AccountsIQ’s competitors include the likes of Sage Intacct, Netsuite and Acumatica, he said.