Bill.com Raises $50 Million For Cloud Invoicing [Exclusive]
Silicon Valley Bank's expansive roster of small business clients gives it a giant window into the technology world, as long it's paying attention to the software being used by its customers.
Sometimes the bank gets excited enough about a product to invest directly in the start-up that created it. That wasn't the only factor in the bank's big new investment in Bill.com, but it played a role.
Bill.com, a provider of accounting software used by 600,000 businesses, said Wednesday it raised $50 million in equity and debt from Silicon Valley Bank along with existing backers includingEmergence Capital, August Capital and Icon Ventures.
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"They've built a good brand and something that's clearly recognized, and we've seen clients at a bunch of different stages leveraging their platform," said Jake Moseley, senior market manager for Silicon Valley Bank. They've "differentiated themselves in the space and created a very simple and scalable solution to what we believe is a very common challenge for business customers."
That challenge involves having too many bills and invoices floating around in paper form, even at a time when technology is taking over the workplace.
Founded in 2006 by Rene Lacerte, Bill.com developed cloud-based software that lets businesses of all sizes automate accounts payable and receivable. Instead of bill approvals being passed around the office in manila envelopes or tracked via spreadsheets, Bill.com's system gives accounting and finance departments visibility into all of their outstanding invoices.
Bill.com financing rounds
2007 DCM, Emergence Capital $2.1 mln
2009 August Capital $8.5 mln
2010 Jafco (now Icon Ventures) $8.5 mln
2011 Financial Partners Fund $15 mln
2013 Scale Venture Partners $38 mln
2015 Silicon Valley Bank $50 mln
Lacerte says customers can chop 50 to 75 percent off the time it takes them to deal with payments and invoices, and get paid two to three times faster. The software also integrates with accounting products from Xero, NetSuite, Intuit's QuickBooks and Intacct, so data sync up easily.
There's no shortage of competition though. Some of those companies have overlapping product lines, and other start-ups like FreshBooksand Wave Accounting are bringing accounting functions to small businesses in the cloud. Lacerte says his product is the best choice for clients who want accounts payable, accounts receivable and document management in one place.
"We're really focused on magically simple business payments," Lacerte said from the company's headquarters in Palo Alto, California. Because consumers have been doing electronic transactions for years, Lacerte calls his product the "consumerization of payments applied to business world."
According to Bill.com's website, subscriptions start at $19 per user per month and go up to $49, with custom pricing for enterprise clients. Bigger companies often use Bill.com directly, while many small businesses offload payments to their banks and accounting firms, which are increasingly adopting the product.
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Bill.com previously raised $80 million, including a $38 million financingin 2013 led by Scale Venture Partners. Lacerte said that some of the new money will go toward hiring, as the company plans to expand to 190 employees by the end of the year from about 140 today. He said the company is still two to three years from an initial public offering.
Mozilla, creator of the Firefox Web browser, has been using Bill.com for half a decade, starting with accounts payable, then receivable and then electronic payments. Jim Cook, Mozilla's chief financial officer, said the San Francisco-based developer is spending thousands of dollars a month with Bill.com, but still less than what it would cost for a single full-time employee to handle all that work.
"Just getting rid of paper and physical checks was how we started," said Cook. "As we progressed, it just became clear that it was a better way. It had a better audit trail for me, and was easier and more robust."