French accounting software company Pennylane has doubled its valuation to €2 billion ($2.16 billion) in a new funding round, raising €75 million.
In an interview Pennylane revealed that the funds were raised from a group of venture capital firms, with Sequoia Capital, Alphabet’s CapitalG, and Meritech co-leading the round. DST Global also participated in the funding.
Founded in 2020, Pennylane offers an “all-in-one” accounting platform designed for accountants and financial professionals. The platform is mainly aimed at small to medium-sized businesses, providing tools for expensing, invoicing, cash flow management, and financial forecasting.
“We came in tailoring a product that looks a bit like QuickBooks or Xero but adapting it to the needs of continental accountants, starting with France,” Pennylane’s CEO and co-founder Arthur Waller said.
Pennylane currently serves approximately 4,500 accounting software firms and over 350,000 small and medium-sized enterprises. The startup was valued at €1 billion in a 2024 investment round. While Pennylane currently operates only in France, the recent funding will enable the company to expand its services across Europe, beginning with Germany in the summer.
“It’s going to be a lot of work. It took us approximately five years to have a product mature in France,” Waller said, adding that he hopes to reach product maturity in Germany in a shorter time period of two years.
Pennylane aims to finish the year with around €100 million in annual recurring revenue, which is generated from its accounting software subscriptions that renew each year.
“We are going to get breakeven by end of the year,” Waller said, adding that Pennylane runs on lower customer acquisition costs than other fintechs. “75% of our costs are R&D [research and development],” he added.
Following the new funding round, Pennylane plans to expand its workforce, targeting 800 employees by the end of 2025, up from the current 550. Like many fintech companies, Pennylane is adopting artificial intelligence. Waller stated that the startup is leveraging AI to help clients automate bookkeeping tasks, allowing them to focus on other areas such as advisory services.
“Because we have a modern tech stack, we’re able to embed all kinds of AI, but also GenAI, into the product,” Waller said. “We’re really trying to build a ‘co-pilot’ for the accountant.”
He further mentioned that upcoming electronic invoicing regulations across Europe are encouraging more businesses to explore new digital solutions to meet their accounting requirements.
“Every business in France within a year from now will have to chose a product operator to issue and receive invoices,” Waller said, calling e-invoicing a “huge market.”
Luciana Lixandru, a partner at Sequoia who sits on the board of Pennylane, said the reforms represent a “massive market opportunity” as the accounting industry is still catching up in terms of digitization.
“The reality is the market is very fragmented,” Lixandru said. “In each country there are one or two decades-old incumbents, and few options that serve both SMBs and their accountants.”
