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Despite all the doom and gloom talk about economics and entrepreneurship It is actually on the rise In the US: In 2024, an average of 430,000 new job applications were filed each month, representing a 50% increase from 2019.
But the number of accountants these new companies will need to maintain their books, file taxes, and do related accounting work He dipped. almost 75% of CPAs He is expected to retire within a decade, and Fewer graduates We are Accounting selection Because they simply don’t pay the same amount as fields like technology and finance.
Serial entrepreneur David Phillips sees an opportunity to fill this growing gap with his latest venture Fonduewhich uses software, artificial intelligence and accounting experts to deliver a bookkeeping platform targeting startups and SMEs.
Phillips founded Fondo in 2020 after selling his coding school startup Hackbright to Capella University in 2016. He is also an angel investor, having invested in more than 85 startups, including Rippling, Flexport, and Liquid Death.
The 4-year-old startup, which operates on a subscription-based model, has already acquired nearly 1,200 customers, reached annual recurring revenue of $6 million, and is profitable, Phillips said. Its clients include ElevenLabs, Karat, PostHog, Campus, and Limitless AI.
“To date, we have saved our clients more than $75 million in Delaware franchise tax and helped them recover more than $16 million from the IRS in tax credits,” Phillips said.
Doubling down on its efforts, the company recently raised a $7 million seed round led by Money Forward, a Tokyo-based fintech company, with participation from Y Combinator, Motley Fool Ventures, Next Coast Ventures, a16z Scout Fund, and Index Ventures Scout. Fund, and twenty-two projects. The round values the company at $66 million.
Fondo is certainly not the only one who has identified the opportunity here. A group of companies, incl pilotDigits, Final and Bench provide accounting services for small and medium businesses.
But Phillips feels Fondo differentiates itself by offering a “holistic solution” targeting high-growth startups. “Traditionally, founders use separate services for each function, which leads to inefficiency and increased risk of errors,” he said. “Fondo brings these elements together into one platform to simplify financial and tax processes for startups.”
The company will use the proceeds to invest in products and automation. Phillips said he is also building an AI agent for his internal team and clients, who can use it to derive insights and analysis about their financials, accounts, cash flows and more.
Fondo currently has about 70 employees and is hiring in product, engineering, accounting and other roles.
“We’re focused on building a robust product that evolves with startups’ needs. This includes expanding our analytics and reporting capabilities, adding integrations with other tools founders use, and enhancing our tax-saving options. We’re also looking at ways to support startups with Expanding internationally, overcoming the complexities of global compliance.”
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