Hubdoc has raised a $6 million seed round led by the BDC IT Venture Fund and Round13 Capital, with participation from Hyde Park Venture Partners and other investors.
Launched in 2014, Hubdoc’s accounting platform automatically collects and analyzes business documents for financial reporting, reconciliation, and audit-proofing. Co-founders and co-CEOs Jamie Shulman and Jamie McDonald launched Hubdoc after their accounting experience with their former lead generation business, Spark.
While they said they had a good relationship with their bookkeepers, generally, businesses don’t have the same experiences. “[There’s] a lot of back and forth paperwork, and the bookkeepers don’t like the clients, and the clients don’t like the bookkeepers because there’s too many questions being asked.”
“There’s a long way to go to having people adopt that cloud accounting software.”
Rather than build out a cloud-based accounting system from the ground up, Hubdoc syncs with popular accounting software like Xero and QuickBooks. Hubdoc was recognized as the 2016 Xero App Partner of the Year, and said that it supports “thousands” of accounting and bookkeeping firms.
For Hubdoc, the goal is to take care of the administrative tasks of individual bookkeepers, and free up their time to take on a more advisory role to businesses.
“Because we focused almost exclusively on advising [for] the accountants and bookkeepers, we’re seeing huge traction letting them scale their businesses and save all that time. We do have a huge number of businesses that come to us directly, and although we don’t focus on that as much, it’s a huge savings for the businesses as well,” said Shulman.
“Hubdoc is a core application in the cloud accounting technology stack, and is driving huge efficiency gains for accounting firms and small businesses around the world,” said Bruce Croxon, founder of Round 13 Capital. “We are excited to invest in real-world, practical applications of machine learning and artificial intelligence. We are fully behind the outstanding team at Hubdoc and the problems they are solving.”
The funding will be used to scale growth in North America, Australia, and the United Kingdom, and is currently hiring software developers, data scientists, and sales and marketing experts.
“It’s an incredibly forward-thinking accounting market,” Shulman said of Australia. “The accountants and bookkeepers and their firms there are ahead of North America, in part because of Xero — they’ve really driven automation, technology-first accounting and bookkeeping in Australia.”
While many industries are shifting their data to the cloud, Shulman says that there’s still a major gap in accounting firms adoping the technology. “There’s a long way to go to having people adopt that cloud accounting software. If we think of it as a journey — going from paper, to receipts, to typing into a desktop software that you then have to send a file to a client — to a world where everything is moving with the cloud and being done automatically in the background, we’re driving that.”