Like clockwork, Penny Lane has raised another 40 million euros ($43 million at today's exchange rates). This new funding round comes after the accounting startup raised €4 million in 2020, €15 million in 2021, €15 million again in 2021, €50 million in 2022 and €30 million in 2023. I was disappointed.
You might think that's a lot of money for a company working on accounting software. It's because this startup is growing steadily, with over 2,000 accounting firms now using Penny Lane as their primary software tool. This is because we do.
Some companies with in-house accountants also use Penny Lane directly, but the majority of the company's customers come from these accounting firms. Overall, in France he means 120,000 small and medium-sized businesses rely on Penny Lane for their accounting needs.
Over the past two years, Pennylane's small business user base has grown 40x. This kind of growth rate is not seen very often, even in startups.
“We have a glass ceiling with our ERP software. We are not looking to replace SAP, but SAP is a very good choice as an accounting and finance tool for small and medium-sized businesses. We work with a little over 1,000 people,” Penny Lane 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 Penny Lane has now reached unicorn status, meaning the company is valued at more than $1 billion.
In Penny Lane's case, Waller said the valuation was “just over €1 billion”. “It’s about double the valuation of our last funding,” he added.
Manage your business finances in one app
In addition to Pennylane's unique distribution strategy, the company has been adding new features at a rapid pace. As his newest SaaS product, it connects directly to third-party services that hold valuable information. For example, you can use the Pennylane interface to retrieve bank statements, import receipts from Dropbox, and get billing information from Stripe.
Combined with in-house OCR technology, Pennylane saves you time entering data into your accounting platform. Penny Lane has also added fintech products with professional bank cards and payment cards integrated directly into the platform.
You don't have to use Pennylane as a bank account, but you can. 20% of Penny Lane customers have a Penny Lane bank account. Also, other fintech companies like Qonto are also increasing their financial and accounting management capabilities, so it is important to offer an all-in-one accounting and finance product.
Perhaps Penny Lane wants to be Quant before Quant becomes Penny Lane. Of course, both Pennylane and Qonto integrate with other services, so users can sign up for both services and use them both seamlessly. “But when you run a restaurant, he wants everything in one place. He likes to have just one software subscription,” Waller said.
Additionally, both the business owner and the accounting firm have access to the same platform, so everything is in sync. Pennylane also handles invoicing, purchase orders, supplier payments, accounts payable, and more.
Finally, Pennylane leverages artificial intelligence in two different ways. He is a kind of accounting co-pilot, one to find relevant information from accounting data, and one to assist accountants in following accounting rules in the most complex edge cases.
Penny Lane does not have funding issues, but expects to be profitable within the next 12 to 18 months. And if there's one thing Penny Lane is good at, it's tracking startup finances.