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French accounting software company Pennylane doubled its valuation to 2 billion euros ($2.16 billion) in a new €75 million financing.
Pennylane told CNBC it raised new funds from many venture capital, with Sequoia leading the round, while Alphabet’s Capitalg, Meritech and DST Global were also involved.
Founded in 2020, Pennylane sells what it calls a “one-to-one” accounting platform, which is used by accountants and other financial professionals.
The platform is primarily targeted at small and medium-sized companies and provides tools for features covering expenditure, invoices, cash flow management and financial forecasting.
“Let’s tailor the product that looks a bit like it (Intuit’s) QuickBooks or Xero However, starting from France, adapt it to the needs of mainland accountants. ” Pennylane CEO and co-founder Arthur Waller told CNBC.
Pennylane currently serves approximately 4,500 accounting firms and more than 350,000 small and medium-sized businesses. The startup previously valued at 1 billion euros in its investment round in 2024.
European expansion
Currently, Pennylane only operates in France. But after a new fundraiser, the startup is now planning to expand its services in Europe starting in the summer from Germany.
“It’s going to be a lot of work. We’ve spent about five years maturing in France.
Pennylane plans to end the year with annual recurring revenue of approximately €100 million, as measured by annual revenue generated by annual renewal subscriptions.
“We will be breaking even by the end of the year,” Waller said, adding that Pennylane’s customer acquisition costs are lower than other fintechs. He added: “75% of our expenses are R&D (R&D).
Pennylane also plans to increase recruitment after a new funding round. It hopes to grow to 800 employees by the end of 2025, up from the current 550 employees.
The accountant’s “co-pilot”
Like many other fintechs, Pennylane is embracing artificial intelligence. Waller said the startup is using the technology to help clients automate bookkeeping automation and provide time for other things like consulting services for free.
“Because we have a modern technology stack, we are able to embed all kinds of AI into the product,” Waller told CNBC. “We are really working to build ‘Co-pilot’ for accountants.”
He added that new electronic invoice regulations that are in effect throughout Europe are driving more and more companies to consider new digital products to meet their accounting needs.
“In a year from now on, every business in France has to choose a product operator to issue and receive invoices,” Waller said.
Luciana Lixandru, a partner of Pennylane’s board member, said the reform represents a “massive market opportunity” as the accounting industry is still catching up on digital.
“The reality is that the market is very fragmented,” Lixandru told CNBC via email. “In every country, there are one or two decades of incumbents, and there are few options that apply to small and medium-sized businesses and their accountants.”
