Artificial intelligence and new regulations are transforming the accounting profession in France, creating opportunities for software start-ups. Pennylane, a six-year-old company, has built a financial operating system used by roughly a third of France's small or medium-size businesses. The Paris-based start-up, valued at about $4.25 billion, aims to build a 500 billion-euro company and expand across Europe. Traditionally, businesses sent financial information compiled from paper documents to bookkeepers through disconnected software, resulting in outdated financial pictures.
Pennylane offers a single platform where companies and accountants work together for quick, accurate financial readouts. The company began with an in-house accounting business and quickly shifted to selling software to accountants, pitching itself as an indispensable tool. Nearly all of Pennylane's business customers come through their accountants.
The firm has adopted accountant-friendly policies, including a cap on price increases and a refusal to help customers switch practices without bookkeeper permission. Its tools enable bookkeepers to process ledgers more quickly and cheaply while giving customers better day-to-day financial visibility. Pennylane now employs about 1,200 people, generated 222 million euros in annual recurring revenue, and raised roughly $460 million from investors including Sequoia Capital, Capital G and Blackstone.
France's recent requirement for electronic invoicing has given Pennylane about 20 percent of the e-invoicing market, and the company is expanding into Germany, Spain and potentially Britain.
Source: New York Times Business · Summarized by HeadlinesBriefing