Zeni, a fintech that automates accounting and bookkeeping processes for startups, raised $13.5 million today in a Series A funding round.
The round was led by Saama Capital, with participation from Silicon Valley Bank Financial Group, Sierra Ventures and former Google SVP Amit Singhal, among others.
Palo Alto-based Zeni launched in 2019 and secured its first paying customers in January 2020. It now manages more than $200 million in funds monthly for more than 100 startups and processed more than $300 million in transaction volume in its first year. That processing volume is expected to jump to $1 billion during the next 12 months, a projection based on the rate at which Zeni grows its customer base and the growth of its existing customers, co-founder and CEO Swapnil Shinde told Bank Automation News.
Zeni charges its customers a flat monthly fee for its automated bookkeeping, accounting and other CFO-related services, which include bill pay and invoicing, receipt and reconciliation management, budgeting and payroll administration. On a more granular level, the fintech built a receipt automation tool that automatically intercepts receipts sent to Zeni via email, then reconciles and matches them with the correct transaction in the corresponding customers’ accounting software, Shinde said. After reconciliation and matching, a “Zeni Bot” automatically forwards the email, providing a link to the transaction, for the finance team to review.
Another automation currently in development helps with transaction categorization, Shinde said. The auto-categorization engine uses artificial intelligence (AI) to learn from Zeni’s human experts as they categorize every incoming transaction. The AI engine becomes smarter as human experts approve or correct the auto-categorization, he added.
Zeni also offers AI-driven insights that highlight key factors that contribute to changes in customers’ monthly finances. For example, if a startup’s operating expenses increase month over month, the AI formulated insights would note the primary factors affecting the increase, for example salaries and contractor fees, Shinde said.
“To provide this level of detail, a traditional accountant would have to manually identify the factors affecting change, calculate the percent and dollar amount difference, and update their customers via email,” Shinde said. “By automatically and proactively sharing this level of detail with our customers, we’re able to quickly and efficiently alert our customers of the ‘why’ behind the ‘what.’”
With the new capital, Zeni plans to grow its team across all verticals, but will invest heavily in its product, technology and finance teams; the latter comprises bookkeepers, accountants, chartered accountant and tax advisors.
The accounting automation market is set to grow in the coming year, according to several published reports. Research firm Ibis World estimates the U.S. accounting services industry market size will notch $108 billion in 2021, up 10 basis points from 2020. Another February report predicts the global accounting services market will grow to $573 billion this year, up from $544 billion the prior year. A 2019 report by Accenture, a business and technology consultancy firm, found as much as 80% of accounting activity could be automated with limited or no human intervention with three key technologies: robotic process automation, advanced analytics and AI.
Looking forward, Zeni will gear its technology and products to hit the intersection between those three tools.
“Our long-term goal is to use human-assisted artificial intelligence across the entire accounting stack —bookkeeping, bill payments, invoicing, financial projections, yearly taxes and R&D tax credits,” Shinde said. “We recognize the importance of finding the right balance of AI and humans that allows us to grow gracefully.”
Bank Automation Ignite, on April 13-14, is the event for inspiring automation initiatives and investment in financial services. At the virtual event, financial services professionals can discover new use cases and technologies that are accelerating automation in banking. Learn more and register at www.BankAutomationIgnite.com.