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French accounting software company Pennylane has doubled its valuation to 2 billion euros ($2.16 billion) in its new 75 million euro funding round.
Pennylane told CNBC it raised fresh funds from many venture funds co-led by Sequoia Capital, Alphabet’s Capitalg and Meritech. DST Global has also been concluded in a round.
Founded in 2020, Pennylane sells what is known as an “all-in-one” accounting platform used by accountants and other financial professionals.
The platform is primarily aimed at small and medium-sized businesses and offers tools for capabilities spanning expulsion, invoices, cash flow management and financial forecasting.
“We’ve been tweaking a product that looks a bit [Intuit’s] QuickBooks or xero But adapting it to the needs of continental accountants starting from France,” Penny Lane CEO and co-founder Arthur Waller told CNBC.
Pennylane currently serves approximately 4,500 accounting firms and over 350,000 small businesses. The startup was previously valued at 1 billion euros in the 2024 investment round.
Europe’s expansion
For now, Penny Lane operates only in France. However, after new funding, the startup is currently planning to expand its services across Europe, starting in Germany in the summer.
“It’s going to be a lot of work. It took about five years to mature the product in France,” Waller said, adding that he hopes to reach maturity in Germany in a short period of two years.
Pennylane is expected to close the year with recurring revenues of around 100 million euros per year. This is a measure of annual revenue generated from subscriptions renewed annually.
“We’ll be breakeven by the end of the year,” Waller said, adding that Penny Lane will run at a lower customer acquisition cost than other FinTechs. “75% of our costs are R&D [research and development]He added.
Pennylane also plans to boost employment after a new funding round. By the end of 2025, it has grown to 800 employees and is currently about to increase from 550.
“Adjustics” for accountants
Like many other Fintechs, Penny Lane embraces artificial intelligence. Waller said that startups are using the technology to help clients automate bookkeeping and free up time for others such as advisory services.
“We have a modern technology stack so not only can we embed Genai into our products, but also all kinds of AI,” Waller told CNBC. “We’re really trying to build a ‘co-pilot’ for accountants. ”
He added that new e-claim regulations coming into force across Europe are urging more and more businesses to consider new digital products to meet their accounting needs.
“Within a year now, every business in France will need to select a product operator to issue and receive invoices,” Waller says, e is calling “a huge market.”
Luciana Lixandre, a Sequoia partner who works on Penny Lane’s board, said reforms represent “large market opportunities” as the accounting industry is still catching up from a digitalisation perspective.
“The reality is that the market is very fragmented,” Lixandre told CNBC in an email. “Each country has incumbents from a year or 20 years old and there are few options to serve both SMB and its accountants.”
