SMB accounting platform Digits raises $65M led by SoftBank
Digits, a startup building real-time accounting tools for small and medium-sized businesses, raised $65 million in Series C funding at a valuation of $565 million.
Why it matters: The total addressable market is huge, which is why VC money is pouring into the spend management and corporate card sector — even when the company doesn't yet have a revenue-generating product in market.
- The round was led by SoftBank, with Harry Stebbings’ 20VC Growth, GV (fka Google Ventures), and Benchmark participating.
How it works: The Digits platform plugs into SMBs' existing accounting and banking systems to provide a real-time dashboard into their financial activity.
- Founded in 2018, the company launched its first product — Digits Search — last year, which lets companies view all of a company's transactions, categorized.
- Digits Reports, which the company is just now launching, allows accountants to create and customize P&L reports for their SMB clients.
- Both products connect to (and sit on top of) a company's existing accounting software like Quickbooks and their bank account, enabling a real-time view of what's happening.
Of note: Digits' Search and Reports are currently free to use, and Digits has yet to announce pricing for future products but it plans to bill on a SaaS basis.
Between the lines: Digits was founded by Jeff Seibert and Wayne Chang, who built the mobile analytics tool Crashlytics — which they sold to Twitter in 2013.
- "Through the process of building that company, we were stunned by the difference between the tools available to the product side and the finance side," Seibert tells Axios.
- The product team had Google Analytics, real-time dashboards, A/B testing, and performance data — while on the finance side, the company waited weeks for its accountant to send a PDF or Excel report of its finances each month.
State of play: Digits' fundraise comes just days after corporate card company Ramp raised $200 million in funding at an $8.1 billion valuation, and international competitor Jeeves raised $180 million at a valuation of $2.1 billion.
- But the Digits team is approaching the market from a totally different perspective: "We fundamentally think that starting with cards is kind of backwards because then you can only manage the spend on that one card," Seibert says.