Apron ties up £5m funding round to clean up accounts payableby
New payments provider Apron has secured seed funding to boost its product innovation, build up its roster of accounting partners and introduce new integrations.
The $5.5m seed funding round announced earlier this week by new payments provider Apron is led by private equity giant Bessemer Venture Partners, with angel participation from the founders of Melio and Klarna.
According to Apron’s founder and CEO Bogdan Uzebkov, the funding will be used on product innovation, boosting the tool’s accounting partner channel and helping accountants set up payments-as-a-service offerings, and establishing new integrations in the accounting technology ecosystem.
Since its relatively low-key launch earlier this year, Apron has worked on differentiating itself from the multiple payments platforms available in the accounting tech ecosystem. It has done this in two main ways: through its proprietary payments platform and end-to-end payments workflow.
The payments platform element does not use a wallet or Open Banking-driven solution, instead relying on its own bespoke banking rails to make payments, regardless of which bank the customer uses.
In a similar way to the GoCardless system (but in reverse), when a customer wants to pay multiple suppliers at one time in Apron, the tool takes the total amount from the customer’s bank and instantly disperses it to customers.
Open Banking is available for supported accounts or, if unavailable, via instant bank transfer. Apron can also make payments globally, with access to more than 150 countries and more than 30 currencies.
This solution allows Apron customers to avoid the batch payment issues some Open Banking users run into, and swerve the potential added complexities of wallet solutions, which require additional know your customer (KYC) checks, regular topping up and configuration of bank feeds.
End-to-end payments workflow
Apron has also built an end-to-end payments workflow, where accountants and bookkeepers can make supplier or payroll payments on behalf of clients without needing bank account access, or set up approvals processes for confirming transactions with clients that require one click to initiate.
Apron founder Uzebkov, who previously worked at fintech giants Revolut and Square, told AccountingWEB he understood why many accountants have been reticent about offering payments as a service line to clients.
“Payments is still a very manual process,” said Uzebkov. “There are xls files, emails and a lot of other documents flying around. We understand there’s an opportunity for accountants and bookkeepers to make payments on behalf of clients but some are reluctant to get involved in the area because it’s such a manual, inefficient process.”
Uzebkov also flagged research conducted by Apron that highlighted the fact that it takes between five to seven apps to run a typical payments process, with bank apps, accounting software, messaging services, invoice approval apps and trusty Microsoft Excel all featuring heavily.
‘Payments have been a bit of a nightmare’
Apron user Aaron Patrick, head of accounts at Boffix, told AccountingWEB that the solution had helped solve the knotty problem of batch payments for his firm.
“Payments have been a bit of a nightmare,” said Patrick. “Many of our clients have gone down the challenger bank route, which is great for them in many ways, but not when they’re trying to make bulk payments. As soon as you throw bulk payments into the mix, many of the payment providers can’t do it as they’re restricted by the Open Banking framework. Apron is the first solution where you can do bulk payments and approvals seamlessly.
“It pretty much replaces BACS as a service,” continued Patrick. “The accountant can use Apron to set up the payment, the client gets an approval on their phone and clicks to run. For us, payroll wasn’t making money, so this could be the tool that finally makes it more lucrative.”
Through integrations with Xero and QuickBooks Online, Apron can also read invoices and help make the payments process more automated. Through OCR technology built into the platform, if the system spots an outstanding payment on Xero or QuickBooks and the invoice is attached, Apron’s API can see, read and clarify it.
The tool also automatically extracts bank details from the invoice to cut the time and risks associated with manually keying in information.
“For platforms like QuickBooks where there isn’t an area to put bank details, this is a potential game-changer,” added Patrick. “Apron grabs the information and makes it work.”
Apron offers free payroll payments and an accountant partner programme. For supplier payments and approvals, its subscription package starts at £29 a month. It also offers international payments, charging 0.5% on top of the mid-market FX rate, and a pay-by-card solution specific to businesses that need to finance their working capital and can’t access funding with a bank. These include e-commerce businesses that buy abroad and sell domestically, and the service allows them to pay any supplier with a personal or business credit card at an additional cost. For more information and full pricing details visit Apron’s website.