Wave Accounting Inc., the Toronto-based small business accounting software provider, has raised a $10 million Series C round of funding via Menlo Park’s Charles River Ventures, Social+Capital Partnership and an unnamed strategic investor in the financial tech software space, as well as longtime contributor OMERS Ventures.
The funding is earmarked for innovation and the development of small business financial tools.
“With the support of CRV, Social+Capital and OMERS Ventures, we can complete our vision of building a truly disruptive suite of tools for owners of small- and micro-businesses,” says Wave co-founder and CEO Kirk Simpson. “Our strategy goes beyond solving a singular need: We’re taking the fear and pain out of all aspects of financial management, and helping our customers grow healthy, profitable businesses.”
Small business accounting software presents a massive need to fill. Wave claims to be signing up more than 10,000 clients per week to its existing user base of over a million.
Over 30 million businesses in North America, representing 95% of all businesses, have fewer than 10 employees, leaving not much but sales potential for Wave’s Accounting as a Service solution.
Wave’s payroll customers currently process $250 million per year. And with over 5,000 of its customers using Wave’s service for processing card payments in addition to its existing user base invoicing more than $6 billion per year, Wave’s software is responsible for tracking over $60 billion in income and expenses annually.
OMERS Ventures has seen the company grow from the beginning, participating in Wave’s initial $1.5 million seed round in June 2011, just as Wave was graduating from the MaRS Discovery District’s innovation centre, followed by a $5 million Series A round in October 2011, and then a $12 million Series B round in May 2012.
Speaking at the Cantech Investment Conference in Toronto last January, Wave co-founder and Chief Product Officer James Lochrie talked about the confidence boost the company’s long-term association with OMERS has brought them.
“Now when we’re talked about,” said Lochrie, “we’re talked about in the same conversations as you would hear about Intuit or Sage or Zero, multi-billion dollar public companies. We’re in the same lineup as them, simply because we built that brand and built that trust, and we’re accepted in the industry because of that.”