French fintech startup Pennylaine raised 75 million euros (approximately $81 million) and boosted its valuation to 2 billion euros ($2.16 billion). The round was co-led by Sequoia Capital, Alphabet’s Capitalg and Meritech with support from DST Global.
Founded in 2019 by Arthur Waller and former Prime Match founders group, Penny Lane has built accounting software that serves both accountants and the small to medium-sized businesses they support. The platform brings together a variety of features, including invoices, cost tracking, cash flow management, and financial forecasting in what the team calls an “all-in-one” system.
Think of it as a localized alternative to QuickBooks or Xero. However, it focuses on the specific needs of French accountants.
“We’ve been tweaking a product that looks a bit [Intuit’s] He spoke to Arthur Waller, CEO and co-founder of Pennylane, to CNBC.
Pennylane added that its platform is currently used by around 4,500 accounting companies and over 350,000 small businesses. The company was previously valued at 1 billion euros, so the latest valuation jump has been a clear signal for strong recruitment and increased investor confidence, CNBC reported.
Next destination: Germany
Pennylane is still operated exclusively in France, but that is about to change. With the new funding, the team is gearing up for a European expansion that begins in Germany this summer.
“That’s going to be a lot of work,” Waller told CNBC. “It took about five years to get the product right in France. I’ve been looking at it for two years in Germany.”
The company expects to reach 100 million euros in recurring annual revenues by the end of the year, struggling Breakeven around the same time. According to Waller, Pennylane doesn’t spend much less customer acquisition than most fintech startups. 75% of your budget is R&D.
They’re also hired. The staff is expected to grow from 550 to 800 employees by the end of 2025.
I’m leaning against ai
Pennylane has not missed the waves of AI. Waller says the team integrates AI and Genai capabilities into their products to automate boring tasks like bookkeeping, giving accountants time to focus on advice to clients.
“We’re really trying to build a ‘co-pilot’ for accountants,” Waller told CNBC.
He also pointed to regulations on e-introduction of European reception. This requires businesses to choose a software provider to process all incoming and outgoing invoices. That shift, he said, has opened the doors for businesses like Penny Lane.
“Within a year from now, every business in France will need to choose a product operator to issue and receive invoices,” he says, calling “a huge market.”
Sequoia partner Luciana Rixandre, sitting on Penny Lane’s board of directors, agrees.
“The reality is that the market is very fragmented,” she said. “Each country has incumbents from a year or 20 years old, and there are few options to serve both SMB and its accountants.”
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