Accounting Software Maker Intacct Takes On $45M To Pick Up The Pace
Financial management software may seem a sleepy area in tech, destined for a back office and without the buzz of more consumer-facing business products like Dropbox or Square. But there's major money to be had in riding the space …
Context & Ripple Effects
Intacct's $45 million round lands five months after rival Xero pulled in $150 million explicitly to do battle with Intuit in online SMB accounting, turning what Forbes calls a sleepy back-office category into a funded land grab. The pickup was broad for a private software raise — VentureBeat, the Wall Street Journal's Venture Capital Dispatch, local bizjournals and PR Newswire all carried the same story on or about February 18, 2014.
Forbes frames the pitch against consumer-facing darlings like Dropbox — fresh off its own confirmed $250 million round at close to a $10 billion valuation in January 2014 — arguing that unglamorous financial-management software offers comparable money without comparable buzz.
First-order effects
- Intacct gains $45 million to accelerate product development and sales at exactly the moment Xero has signaled it will spend aggressively to win online SMB accounting customers away from incumbent Intuit.
Second-order effects
- Intuit faces two newly capitalized cloud attackers instead of one, pressuring it to defend its small-business base with faster cloud investment rather than relying on desktop lock-in.
- Escalating round sizes raise the capital bar for any smaller accounting-software entrant trying to reach SMB buyers through the same channel.
Third-order effects
- If the funding pattern holds, cloud financial management consolidates around a handful of heavily financed platforms, shifting the category from quiet back-office utilities to a contested, capital-intensive SaaS battleground.
The trend: Cloud SMB accounting is entering a capital-intensification phase, with successive nine-figure-scale rounds from Xero and now Intacct funding a direct assault on Intuit's installed base.