French accounting tech startup Pennylane has raised $43 million in a deal that valued the business at over $1 billion.
Founded in 2020, Pennylane works with SMEs and accounting firms to simplify and digitize their accounting processes. The company’s SaaS model pulls third-party data from platforms like Stripe and Qonto, to help SMEs with their accounting needs. Companies can then centralize receipts, invoices, and country-specific VAT rates.
Based in Paris, Pennylane works with 120,000 SMEs and 2,000 accounting firms but wants to go further and deeper into the market, according to CEO and founder Arthur Waller.
“We’ve seen very strong growth in users and revenues, without having to grow our sales and marketing spend,” Waller told Business Insider. “Our investors offered to reinject capital into the business even when we didn’t need it, and now we can accelerate our product development.”
The $43 million in Series C funding comes from existing investors DST and Sequoia at more than double Pennylane’s last-round valuation, making the company a unicorn.
Despite having no plans to raise capital, Pennylane will look for acquisition opportunities as it looks to add to its suite of products, Waller added.
“We want to make sure we have enough cash in the bank to see if opportunities come up to consolidate,” he said. “Our aim would be to acquire companies that complement our product offering, rather than acquire a customer base. Similarly, we would not be buying companies abroad, it’s not for geographic expansion but rather mastering the core accounting space.”
Pennylane wants to be profitable in the next 18 months while remaining competitive with its growth. Waller said that while many companies in the wider fintech and tech space are experiencing downrounds, the wider market remains aggressive. He cited the acquisitiveness of Norway’s Visma and the strength of incumbent players in accounting as a reason not to pause investing.
Funding will also go towards headcount growth and further development of the company’s AI tools as it looks to provide a value add for accounting firms, which will soon have to contend with the introduction of mandatory electronic invoicing.
Check out Pennylane’s 15-slide pitch deck below:
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