Québec City-based accounting software startup Stamped AI has raised $2 million CAD in seed funding to expand the reach of its solution, which helps small to medium-sized businesses (SMBs) prepare their year-end financial statements.
In an interview with BetaKit, Stamped AI co-founder and CEO Simon Langlois said this process typically involves “spending hours exporting your company’s data into Excel files, so your auditor can audit.”
“We saw that there was a huge opportunity to become this main certifier in the market that will serve the SMBs.”
-Simon Langlois, Stamped AI
Conversely, Stamped is more of a “plug and play and forget”-type solution. “Once we’re integrated with your tech stack, we’ll be working all year round, basically,” said Langlois.
Founded in 2017, Stamped AI is building a platform designed that uses artificial intelligence (AI) to help SMBs streamline and automate the traditionally time and labour-intensive accounting data certification process.
Stamped AI integrates with companies’ frequently used applications like Quickbooks, banking systems, payroll software, and invoice repositories, aggregating financial data throughout the year.
By automating some of the repetitive and clerical tasks associated with this process, the company claims it is able to help its customers prepare their year-end financial statements — such as corporate tax returns and financial statements — “in a faster and more affordable way.”
Stamped AI’s all-equity seed round was led by San Francisco-based Telegraph Hill Capital, with participation from Santa Monica’s Mucker Capital and New York-based I2BF Global Ventures. The fresh financing brings Stamped AI’s total funding to $2.5 million.
Langlois, who is a Chartered Professional Accountant (CPA), describes Stamped AI as a “combination” of a tech startup and a traditional accounting firm. Stamped AI consists of two separate corporate entities: Stamped Technologies, which handles its platform, and Stamped CPA, which is registered to audit and certify financial statements.
“For what we’re doing, we really need to be a CPA,” said Langlois.
Stamped AI is focused on the SMB market, which the CEO described as “underserved.”
“We saw that there was a huge opportunity to become this main certifier in the market that will serve the SMBs, because large firms like the ‘Big Four’ are really well geared towards publicly-listed companies and very large private companies, but there’s a significant shortage in auditors that have the ability to serve [SMBs].”
According to the CEO, there’s also “a gap in the market for a tech-enabled auditor,” which he said is what Stamped AI has been “building from the ground up.”
Langlois claims that Stamped AI’s ability to both provide software and certify financial statements in-house is a differentiator in the accounting space. “You can get this certification at most CPA firms out there, but it’s going to be the traditional way of doing things,” he said.
“We see Stamped as a technology company that enables accounting firms, clients and auditors to operate more efficiently in terms of time and resources,” Telegraph Hill Capital Principal Varun Dalal told BetaKit.
Dalal added that Telegraph believes the machine learning tools Stamped AI is building “will drive its success and differentiate it as a technology company operating in the audit sector. Something like Carta has done for cap table management.”
Langlois’ journey began at one of the ‘Big Four’ accounting firms. The CEO spent over four years working at PricewaterhouseCoopers (PwC), rising to senior associate before shifting gears and joining Québec City-based Poka, which offers a software platform for factory workers, as CFO. After working at Poka for a couple of years, Langlois said he grew tired of the repetitive nature of being CFO of a small startup, and returned to PwC as a manager.
But startup life changed him — he quickly grew frustrated by lack of tech adoption at PwC, and realizing that there was no new tech alternative for the year-end accounting process, decided to start building one.
Stamped AI graduated from the AI stream of Creative Destruction Lab Montréal’s accelerator program in 2019. In February 2020, the startup raised $500,000 in pre-seed funding from Montréal-based FounderFuel, Real Ventures, and 0MC Capital.
Shortly after that, Langlois’ co-founder and former CTO Philippe Dionne decided to leave the company in June 2020 following what he described as a “major disagreement” in a December 2020 blog post. According to Langlois, this disagreement was related to Stamped AI’s direction and progress.
Following the close of Stamped AI’s seed round last November, Dionne sold shares in the business to Toronto-based Highline Beta and undisclosed angel investors as part of a secondary offering that was not included in Stamped AI’s $2 million seed round.
According to Langlois, Dionne sold only some of his shares as part of this secondary offering, electing to keep the remainder because “he still strongly believes in the potential upside in the business”
Most of Stamped AI’s customers are currently based in Québec, but the startup offers service in both French and English. After beginning to expand into Ontario and British Columbia last year, Langlois said the company intends to ramp up its presence in these markets ahead of a planned expansion into the United States down the road.
Stamped AI, which is currently participating in the Intuit Prosperity AI accelerator program, plans to use its seed funding to support these geographic expansion plans and continue building out its tech systems for its team of accountants.
The startup is currently working with bookkeeping firms, which offer access to a broad selection of potential paying SMB clients. Langlois described bookkeeping firms as an early adopter that is “over-exposed to bad year-end experiences.”
Stamped AI currently has 21 full-time employees, who consist of a mix of tech people and accountants, many of which come from Big Four firms.
Ultimately, Langlois said Stamped AI hopes to become “the leader in the year-end [accounting] service space.” According to Dalal, it’s a market worth “10s of billions of dollars.”
But the startup’s ambitions also reach beyond just end-of-year accounting. “At some point, we would like to be able to provide certified financial statements at any given time during the year,” said Langlois.
Feature image of Simon Langlois courtesy Stamped AI.