It's not a sexy topic, but someone needs to talk about it: The CFO tech stack (the software used by the world's chief financial officers) is on the verge of disruption. That's the word of Jonathan Sanders, CEO and co-founder of Light, a Danish startup that emerged from stealth on Wednesday after raising $13 million in a seed round led by European venture capital giant Atomico.
The Copenhagen-based startup is reinventing general ledger software from the ground up, using AI to cleanse transactional data, helping finance teams ask questions in plain English and get understandable answers from their data.
Wright relies on automated ledger
Having worked for companies such as investment bank Credit Suisse and expense management scale-up Pleo for small businesses, Sanders has plenty of insight into the working environment of a CFO's office: ERP (enterprise resource planning) software is king, with support for CRM (customer relationship management), HR (human resources), project management and, perhaps the most important component, general ledger accounting.
The general ledger is a comprehensive record of a company's financial transactions – every dollar, dime, and penny that goes in and out. For a chief financial officer, the general ledger is important as the single source of truth about the company's financial health. And it's this element of ERP that Wright is focused on bringing into today's digital age, where AI is increasingly dominant.
“Our mission is to be the first automated ledger system for global enterprises,” Sanders told TechCrunch. “We believe CFOs and finance teams deserve the full benefits of AI and the full knowledge and expertise that large enterprise organizations have when it comes to accounting and tax, which they haven't had before.”
Light dashboard on desktop and mobile. Image courtesy of LightImage courtesy of Light
Companies integrate Light with various CRM and HRM tools, banks, and even communication channels like Microsoft Teams and Slack. The platform's “AI” is a combination of several models that each serve a different purpose for the finance industry, such as handling manual tasks like line item coding (assigning a code to each individual transaction), calculating the correct tax code, and related bookkeeping tasks.
“We use one model to ensure all items are recorded for the correct taxes and accounting, and another model to allow management to ask questions about revenue, costs and profits directly from Slack,” says Sanders. “The AI landscape is changing rapidly, so we continue to experiment with a combination of off-the-shelf models and fine-tuned open-source models.”
By unbundling ERP, Light is giving the finger to legacy applications like Oracle NetSuite, SAP ERP and Microsoft Dynamics, while also taking on “younger” upstarts like Quickbooks and Xero. The company targets “international enterprises with multiple entities” and promises to provide a unified dashboard of all their global transactions that is “fully searchable and queryable using AI.”
This was all a result of Sanders’ own personal dissatisfaction with working with the existing ERP system.
“One time, I was working with my finance team on a report from our ERP system and the page was taking over 20 seconds to load. I asked them why the Wi-Fi was so slow and they told me it wasn't the Wi-Fi, it was the product. I knew we had to do something right away,” says Sanders.
On top of that, Sanders is also touting a sleeker, “Apple-esque” interface design that finance teams won't be reluctant to use.
Light vs Oracle NetSuite: Comparison Image courtesy of LightImage courtesy of Light
In short, Light doesn't offer features like CRM, HR, project management, etc., but only features like accounts receivable (AR), accounts payable (AP), bookkeeping, and VAT reporting.
But why bother with unbundling in the first place?
Implementing a full-featured ERP makes sense for some businesses (such as manufacturing) that need to tightly integrate sales, supply chain, and employee data, for example. But this isn't the case for many (or even most) businesses today, who are already using standalone tools that traditionally reside in ERP platforms.
“We decided to focus on general ledger in order to build a clear, focused product, which is the hardest and most important problem to solve for modern finance teams,” says Sanders. “Modern companies use the best CRMs like Salesforce and the best HR software like Workday and Factorial, but because there is no global ledger separate from the ERP suite, they are forced to implement a full-stack ERP that incorporates CRM and HRM products they don't use.”
Light is sold as a subscription with volume-based pricing, and it hopes to target a new breed of businesses that are tired of traditional software that is priced per seat and ultimately only accessible to a select few users within a company. So Light is pretty broad in terms of identifying its target markets, but the only thing they have in common is a desire to expand globally.
“The primary day-to-day users are the finance team, including the CFO,” says Sanders. “Whether your company has 50 employees or 5,000, you can leverage Light for your global operations. We've focused on making the interface with the rest of the business seamless, so anyone with the right permissions can easily approve invoices, upload expenses, or look up vendor information and reports.”
easy work
After leaving his position as head of payments at Pleo in 2020, Sanders founded another fintech company called Juni, which developed tools to improve financial management for e-commerce companies. The startup raised more than $280 million, but Sanders left the company in 2022. He claims he was not unhappy about his departure.
“We wanted to take the company in a different direction and I will remain a happy shareholder cheering from the sidelines,” Sanders said.
So in 2023, Sanders incorporated Lite. Though it has operated in secrecy for the past year, the platform is already technically live and available worldwide. Most of its current clients are Nordic companies, including Worksum, Renas, Family and Proxify, which Sanders says will help the company thrive.
“In the Nordic countries and other smaller European countries, companies have to go global from day one,” says Sanders, “which means they have to incorporate in other countries as soon as they find commercial traction, which breaks their financial backbone. Our mission is to help these companies early on in their globalization journey and free them from the burden of existing legacy solutions.”
Light's seed round was led by Atomico, along with participation from Cherry Ventures, Entrée Capital, Seedcamp, and angel investors including German soccer player Mario Götze.