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For accounting departments, no software is more important than the general ledger system. It’s the central hub that summarizes all financial transactions, providing the essential data needed to create accurate financial statements.
“The general ledger is the beating heart of the finance function, and so asking a company to remove it is a kind of open-heart surgery,” said Julien Bek, a partner at Sequoia Capital.
Until a few years ago, Bek believed that VCs wouldn’t dare to invest in startups building new general ledger software. It’s not only difficult to get customers to switch from their existing accounting software, but building a new general ledger business is also very challenging, he explained.
Bek changed his mind when he discovered Rillet, a three-year-old company leveraging machine learning and generative AI to automate accounting reports. Rillet directly pulls data from their customers’ banks and platforms, such as Salesforce, Stripe, Ramp, Brex and Rippling, to generate essential financial statements, including the balance sheet and income statement.
Rillet founder Nicolas Kopp (pictured above) says thanks to machine learning and AI, his company’s software enables accounting and finance teams at medium-sized companies to close their monthly or quarterly books in hours, a process that previously took weeks. Prior to Rillet, Kopp was U.S. CEO of European neobank N26.
Since launching its product last year, Rillet’s revenue has grown five-fold, and it has brought on nearly 200 customers, including fast-growing companies like Windsurf, the AI coding assistant reportedly sold to OpenAI for $3 billion, and Decagon, an AI customer support startup reportedly valued at $1.6 billion.
In the past, companies of that size would likely have installed NetSuite, general ledger software developed in the late 1990s that is still very popular with middle-sized companies. But NetSuite is slow and clunky.
“I think a third of their deals are coming from [customers] replacing NetSuite, or NetSuite-like systems,” Bek said about Rillet’s customers.
It was this statistic that helped Sequoia decide to invest. “What I was watching for is that they start replacing NetSuite. Because [with] many companies, you can get the small customers, but getting the big ones, I think that’s really hard,” Bek said.
On Wednesday, Rillet said it has raised a $25 million Series A led by Sequoia Capital, with participation from existing investors. The fresh funding comes 10 months after the company raised a $13.5 million seed and pre-seed round from First Round Capital, Creandum and Susa Ventures.
Rillet’s AI makes the installation process relatively painless. It used to take many months to transfer all the data from one general ledger software to another, Rillet can reduce that time to about four to six weeks, Kopp said. Clients simply continue to use the existing general ledger platform until they are sure that all the data has moved to Rillet.
According to Kopp, Rillet competes with NetSuite and other legacy platforms, but currently doesn’t have a clear rival that leverages AI and machine learning to replace accounting systems for mid-size companies. Digits, another AI accounting startup, recently launched its autonomously-powered general ledger, but unlike Rillet, it targets small businesses that use QuickBooks and Xero.
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