There are 138K accounting firms in the United States and the industry, as a large, is embracing the need and value of using automation. Botkeeper is an automated bookkeeping support platform that relies on a combination of vetted accountants, machine learning, and artificial intelligence to allow firms to work more efficiently. The platform is accessible on any device, including mobile, and is designed to be used by both business owners and their accounting firms in tandem. The solution automates and introduces efficiencies into onboarding, integration of client data, on-going bookkeeping, and reporting. The platform also has built-in integration capabilities with dozens of SaaS platforms that include Gusto, Stripe, Quickbooks, and Salesforce to provide holistic views of a business. Currently trusted by 1,200+ clients, Botkeeper saves an average of 45% for its users.
Boston TechWatch caught up with CEO and Cofounder Enrico Palmerino to learn more about Botkeeper’s expansion plans, scaling the business to 100+ employees, and recent funding round from notable investors, which brings the total funding raised to $47.5M since its founding in 2015.
Who were your investors and how much did you raise?
The Series B round was for $25M and led by Point72 Ventures, the global venture capital firm backed by prominent investor Steve Cohen. Additional investors include High Alpha Capital, Oakridge Management Group, Peak State as well as existing investors Ignition Partners, Greycroft Partners, Gradient Ventures, and Sorenson Capital.
Tell us about the product or service that Botkeeper offers.
Botkeeper provides automated bookkeeping support to accounting firms and businesses by using a powerful combination of skilled accountants, machine learning, and artificial intelligence. Clients receive 24/7 accounting and support as well as incredible insight into their financials with interactive dashboards and unlimited reporting. Botkeeper’s Accounting Partners are able to grow their book of business and provide high-quality services to their clients, increasing their ability to take on new clients, all while getting crystal clean financials at tax time- all while reducing overhead. Botkeeper is the only solution of its kind, acting as a force multiplier for business owners and Accounting firms.
What inspired the start of Botkeeper?
Botkeeper’s vision (and slogan) was to build and deliver the Future of Bookkeeping. Having developed an AI-powered platform, Botkeeper’s technology connects and digest financial and non-financial data, processes it through its machine learning models, reviews and ensures accuracy with a skilled team of accountants, and delivers accurate financial data and closed books to accounting firms and businesses in either QuickBooks or Xero. Accounting firms love Botkeeper because it allows them to focus their time on client service, advisory, complicated accounting, and exception handling. As the back-office operations become more important than ever, Botkeeper will double down on product innovation to continue assisting its current and new accounting partners.
How is Botkeeper different?
Botkeeper uses a really unique blend of technology and amazingly talented people. Repetitive and predictable tasks like transaction categorization and reconciliations have successfully been automated by the Botkeeper tech, while the complex and unpredictable tasks that require critical thinking, are handled by our team of skilled accountants and bookkeepers. Traditional automation can’t handle the constant change and infinite variability of these tasks. Automating them requires advanced AI that can understand, learn, and adapt. The result is superior bookkeeping!
What market does Botkeeper target and how big is it?
Botkeeper is focused on supporting US Accounting firms currently, of which there are approximately 138K. In partnering with firms, we support not only the firm but their clients. There are 30.2M small businesses alone in the US, according to 99Firms.
What’s your business model?
Our Accounting Partner model is two-fold. We provide a suite of features for the CPA to run their firm on, the Accounting Partner Platform, which allows the firm to offer the best technology solutions to their clients, streamline communication, integrate client apps/systems, increase security with file sharing and storage, and more. The second piece of the model is our service element. Using a combination of ML, AI, RPA, and skilled accountants, we provide highly efficient, timely, and secure bookkeeping services to the clients of the CPA firm as well.
How has the business impacted by COVID-19?
This announcement comes as the need to augment the traditional back-office bookkeeping operations continues to rise to meet the growing demand for better automation and virtual choices. The increasing need for automation that enables higher efficiency, better capacity, sustainable economies of scale being driven by the COVID-19 has resulted in increasing demands being put on Accounting Professionals, who have been continuing to operate as essential business providers. At a time when a majority of businesses are under intense pressure to stay alive, it becomes absolutely imperative to ensure the business’s financials are accurate, up-to-date, and easily accessible for decision making. Accounting Professionals are facing unprecedented pressure to deliver service and guidance quickly, reliably, and efficiently while keeping their employees safe- and automation is the key to meeting those challenges.
What was the funding process like?
The highly competitive round managed to attract a half dozen term sheets and a dozen-plus eager participants, resulting in a signed term sheet within 35 days, and successful close in 59 days- the entire process having been conducted completely virtually.
What are the biggest challenges that you faced while raising capital?
Going into a raise, amidst one of the worst financial downturns of the century, was definitely something we didn’t expect to be facing at the beginning of the year!
What are the milestones you plan to achieve in the next six months?
We’re planning on doubling our company revenue, as well as adding skilled leaders to our product and finance teams to further help accelerate growth and our mission to support accountants and accounting firms
What advice can you offer companies in Boston that do not have a fresh injection of capital in the bank?
Batten down the hatches – spend a decent amount of time with management doing scenario planning. Create several scenarios and trigger points (or trigger metrics) that will result in various cost-cutting or growth investing measures. Ignore advice about cutting deep once, because you’re better off cutting according to the situation. COVID-19 and data points on the economy are changing so rapidly that you want to design various scenarios and plans that have you taking the right actions at the right times.
Create several scenarios and trigger points (or trigger metrics) that will result in various cost-cutting or growth investing measures. Ignore advice about cutting deep once, because you’re better off cutting according to the situation. COVID-19 and data points on the economy are changing so rapidly that you want to design various scenarios and plans that have you taking the right actions at the right times.
Going overboard on cutting can kill a company, and cutting too little, too frequently, can also kill a company. Consider instead, creating 3-5 scenarios of cuts, stability, and investment, using key metrics to be the triggers of each. This way you’re swift, you have actions planned, and your management has aligned on the logic and outcomes being sought.
Where do you see the company going now over the near term?
I see Botkeeper further establishing itself as the leading technology platform for accountants and accounting firms seeking a solution to combat issues with staffing, growth, error, and processing speed. In the next 6 months, I want Botkeeper and the term “Botkeeping” to become a household name and term among accounting professionals.
What is your favorite restaurant in Boston?
It’s a tie between Lolita’s and Buttermilk & Bourbon. Depends on whether I want dark & flavorful Mexican experience with amazing margaritas, or I want a modern twist on warm and savory southern food with sweet bourbons.
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