AI Will Be Doing More Accounting If Startup Investors Have Their Way

Accounting and auditing is a perpetual growth market. Yet at the same time, businesses and households seem to find there are never enough resources to keep up with the demands of modern-day recordkeeping.

Startups have been pitching tools to help for a long time. Tax prep software pioneer Intuit turned 40 last year. Over intervening decades, investors have pumped billions into startups developing software to automate bookkeeping, auditing, compliance and tax filing.

Now, increasingly, they’re turning AI to the task. The latest company to raise a big round taking this route is DataSnipper, an audit automation platform that on Thursday announced a $100 million Series B financing led by Index Ventures.

The round sets a $1 billion valuation for Amsterdam- and New York-based DataSnipper, which claims its tools enable auditors to “automate away up to 90% of menial tasks.” The 6-year-old company says its customer base and revenue doubled last year, with more than 400,000 auditors now using its software.

DataSnipper’s financing isn’t the only large accounting-related round to close in recent months. While funding to the sector was down year-over-year, companies in the Crunchbase accounting category still closed on more than $700 million in 2023. And it looks like 2024 is off to a pretty good start.

For a sense of where the money is going, we assembled a sample set of 20 companies funded in the past year with a full or partial focus on accounting and bookkeeping:

AI and freelance are focus areas

Not surprisingly, many of the top funding recipients talk up their AI applications.

For instance, Stampli, a Silicon Valley startup that picked up $61 million in Series D funding in October, offers an AI assistant named “Billy the Bot” to help with invoice processing and recordkeeping. And Trullion, which landed $15 million in an April Series B, describes itself as an AI-powered auditing and accounting platform.

Freelance is another significant focus area. Indy, a French upstart focused on freelancers and professional service providers, landed a $44 million Series C in November. Meanwhile, Hnry, based in New Zealand, raised $35 million a year ago for an accounting automation tool for freelancers, contractors and other self-employed workers.

Accounting, auditing and bookkeeping represents such a vast market that startups targeting a single profession or business type can still take a massively scalable approach. Companies in this category include Restaurant365, focused on accounting, payroll and other functions for restaurant operators, and Heard Technologies, which offers bookkeeping and tax prep for therapists.

Big numbers

In case anyone is wondering, revenue for accounting and auditing providers is enormous. Per Statistica, in 2022 alone, the Big Four global accounting and auditing firms – Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY) and KPMG reported a combined revenue of almost 190 billion U.S. dollars. Moreover, the number of people employed as accountants and auditors continues to grow.

Looking ahead, the rise of AI tools gives reason to be optimistic that more banal, repetitive tasks could soon be automated. Nonetheless, the skeptics among us still expect that bookkeeping and taxes for those of us with complicated finances will continue to be a long and resource-intensive slog for some time.