After raising a €40m Series C early last year, French accounting platform Pennylane has secured another €75m in equity, doubling its valuation to €2bn.
The round was led by US investor Meritech Capital and Capital G, the growth fund operated by Google’s parent company Alphabet. Pennylane’s historical investors Sequoia and DST Capital also participated.
Pennylane has built a platform to improve workflows between enterprises and their accountants, which centralises invoices, tax returns and financial statements — where typically communications would occur over email or Dropbox. This allows accountants to increase their productivity by 20-30%, according to the company.
The startup operates in France, where electronic invoicing is set to become mandatory for enterprises in September 2026. Cofounder Arthur Waller says that this has created an opportunity to grab market shares, and prompted the decision to raise fresh funds.
“We didn’t need more cash,” Waller tells Sifted, “but with the arrival of electronic invoicing, we wanted to hold all the cards.”
The company plans to double down on marketing campaigns and R&D to improve its product offering, including by developing an AI copilot for accountants, and says it will grow from 550 to 800 employees by the end of the year.
The new capital will also fund a continuing M&A strategy, says Waller. Upon raising Pennylane’s Series C last year, the cofounder told Sifted: “We want to be predators, not prey”; since then, the startup has made one acquisition, French startup Billy, which develops connectors to integrate different software.
Why is electronic invoicing important?
Electronic invoicing is increasingly being rolled out across EU countries to comply with a number of directives and national regulations. It means that companies have to replace paper and PDF invoices with structured electronic invoices that allow automatic processing. The main objective is to improve the detection of tax fraud.
In France, the electronic invoicing reform will be coming into force next year.
“Between now and then, six million enterprises will be choosing an operator to send and receive invoices,” says Waller. “It’s a huge opportunity that we can’t miss.”
For now Pennylane is focusing on the French market, but it is likely that other European countries will follow suit.
“It’s a reform that other countries, like Italy, have already adopted, and others will adopt in the future,” says Waller. “The calendar of adoption is the factor that will determine where and when we will launch [outside of France]”.
Pennylane’s growth
Pennylane has seen rapid growth over the past year, tripling the number of small and medium enterprises (SMEs) it serves to 350k. It also counts 4,500 accounting firms as clients.
Waller tells Sifted he anticipates €100m in annual recurring revenues (ARR) by the end of 2025, which means Pennylane will be near-profitable. “This enabled us to fundraise in very favorable conditions,” says Waller.
The startup, however, faces tough competition from both business banking companies, which offer accounting tools to their customers, as well as large incumbent accounting software companies like the UK’s Sage (which has a market cap of $12bn) and Norway’s Visma (valued $21bn).
Read the orginal article: https://sifted.eu/articles/pennylane-75m-fundraise/
