Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

FreeAgent gets new cash injection

by
27th Sep 2011
Save content
Have you found this content useful? Use the button above to save it to your profile.

Online accounting pioneer FreeAgent recently secured investment of more than £2m to accelerate its growth. 

The new investment - led by SM Trust, working with Torch Partners as well as the existing investors - is the fourth external investment since FreeAgent was founded in 2007, bringing total outside investment in the company to over £3m.

Early in 2010, IRIS Group joined the 2009 angel investors Christoph Janz and Robin Klein to take a 10% stake and the role of exclusive reseller for FreeAgent in the UK accountancy practice market.

FreeAgent CEO Ed Molyneux said the new investment resulted in a balanced share between all the participating external investors, and with the original co-founders still owning a significant stake. 

FreeAgent plans to use the latest tranche of cash to accelerate product development. It will also grow its customer support team to handle more users and invest in partnership and marketing initiatives.

“The genuine enthusiasm our customers have for FreeAgent and our focus on simplifying their business finances, have been instrumental in attracting both channel and business partners, as well as hugely influential investment partners. It’s particularly exciting to bring on board investors like SM Trust who share our own vision to ‘democratise accounting’,” Molyneux said.

Asked to explain the concept, Molyneux likened the current situation of entering a bag of receipts at year end into an accounting system to driving down the motorway by looking in the rear-view mirror. Instead, he argued, the accountant should be playing the guiding role of a sat-nav.

“The cost of compliance can be as much as £1,000 for a business only making perhaps £3,000 in profit. That’s far too high, especially as the process adds zero value to the business itself. In an ideal world, the cost of compliance would be the same: zero. To achieve that, we want to give the small company tools they can use to understand how the company is doing for themselves, freeing up the accountant to play a consulting, advisory role on whether to, say, buy-in stock or invest in machinery.”

Fred Coorevits from SM Trust will join the board of FreeAgent as a non-executive director. He commented: “It was clear to us that SME accounting software was sorely in need of re-invention. FreeAgent is far and away the most innovative and visionary company in that space, and we’re really excited to be working together to redefine the accounting software market.”

Molyneux concluded, “In many ways we’re only just getting started, and there’s so much more we want to do in terms of new features that really help to take the pain out of accounting for our customers. 

“This investment will enable us to accelerate our development by bringing on board more world-class engineers and designers. FreeAgent has come a long way since it was founded in 2007. This latest investment means we can move forward with our ambitious plans but also be working really hard to ensure we don’t sacrifice the quality of service or dilute the amazing culture of the company.”

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.