South Florida-based Xendoo has raised $3.5 million in seed funding to help small businesses manage their finances. The seed round was led by Malachi, with investments from Revolution’s Rise of the Rest Seed Fund, DeepWork Capital, Jason Calacanis’ LAUNCH Syndicate, and other follow on investments.
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Lil Roberts, founder and CEO of Xendoo, is a serial entrepreneur, born and raised in South Florida. Roberts decided for her next business that she wanted to be in technology, help small business owners, and reshape an industry although she does not have an accounting background.
“Eighty two percent of the small businesses that go out of business do so from lack of cash flow, not lack of profitability.” according to Roberts who identifies as a business owner who keenly feels the issue of having access to timely financial data.
Xendoo is focused on the true small businesses of America– e-commerce resellers, gyms, hair salons, dry cleaners, funeral parlors, marketing companies, IT providers, and more. Customers are typically companies with revenue of half a million to $10 million. “We have some really unbelievable businesses in 45 states and eight countries.” said Roberts.
What distinguishes Xendoo from QuickBooks, Xero, Wave, and FreshBooks is that these are tools a business owner can use properly or improperly. ScaleFactor, Bench, Botkeeper, inDinero, and Xendoo are addressing similar problems but for distinct markets. For Roberts, the real competition for Xendoo is the 44,000 traditional small accounting firms.
Xendoo delivers customers their financial insights by the fifth business day, the following month. It does the monthly bookkeeping, which gives owners a monthly profit and loss, and balance sheet. And it also keeps companies IRS compliant, and takes care of their annual corporate tax returns. Business owners can see their revenue and profitability trends over time. And if they need to talk to somebody, they can text, call or email.
In fact, Xendoo is wrapped around Xero and is planning for the product to be wrapped around QuickBooks and other accounting tools in 2020.
The defining question before Roberts started the company was, ‘Would small businesses accept virtual accountants?’ Traditional accounting bookkeepers will handle 25 customers. Xendoo’s bookkeepers handle 150 customers.
With 600 customers and growing, Roberts says every small business is a potential opportunity.