The flood of capital pouring into the B.C. tech ecosystem for much of the past year isn’t showing signs of letting up with Vancouver-based Bench Accounting Inc. locking down US$60 million ($73 million).
The Series C financing round, announced Thursday, brings the firm’s total funding to US$113 million ($137 million).
Bench develops software to help automate accounting tasks for about 11,000 businesses globally and describes itself as the largest bookkeeping service in the U.S. market.
“We're the only bookkeeping service of any sort of note that is not based on Intuit QuickBooks,” Bench CEO Ian Crosby told BIV, adding he was never interested in slapping together software and buying some ads before calling it a day as a co-founder in 2012.
“We're taking this longer road to reap, building the entire infrastructure. That all works together with one common vision, and we think that we're building a $100-billion market cap company that's going to be based in Vancouver … Canadian companies are doing that now.”
He said most of the fresh capital will sit on the company’s balance sheet but investment dollars will target expanding its 650-person roster.
The company plans to add about 100 workers to its product development team over the next six months, hiring for positions ranging from software engineers to product managers. About 80% of Bench’s workforce is based in Vancouver and Crosby said the plan is to look for additional workers across North America.
“Why would I spend 10 years my life on accounting, right? It's because it's not about the numbers. It's about people sending us appreciation videos saying, ‘Oh my god you changed my life — thank you.’ And that's worth getting into bed for,” he said.
Canadian e-commerce giant Shopify Inc. (TSX:SHOP) and British software giant Sage Group plc are among the Vancouver fintech’s new investors.
Existing investors Altos Ventures, iNovia Capital and BMO T&I also participated in the funding round.
Crosby said he could not reveal the company’s current valuation following the Series C round “but I can assure you there is a valuation.”
While the pandemic has battered much of the service-based economy and tourism sector over the past year, B.C. tech companies have been of particular interest to global investors.
David Raffa, president of Valeo Corporate Finance Ltd., said the local ecosystem is benefitting from private equity firms swimming in cash amid the pandemic, while credit markets are wide open and interest rates are at record lows.
“You build a dam dependent on a river and the water is piling up, piling up, piling up. Then the dam bursts. And so that’s what happened,” Raffa, whose Vancouver-based firm provides services for mergers and acquisitions and initial public offerings, told BIV in April.
Access to top-tier universities and the large talent pool paid in Canadian dollars at lower comparable salaries than their American counterparts have been particularly enticing, he added.
Since February, a steady stream of so-called unicorns — companies valued at $1 billion or more — have been emerging from the B.C. tech ecosystem.
Galvanize (ACL Services Ltd.), GeoComply Solutions Inc., Thinkific Labs Inc. and Clio (Themis Solutions Inc.) all publicly acknowledged reaching unicorn status this year either through being acquired, locking in additional investments or else by going public.
“When you have the opportunity for large valuations I think it allows companies to go public faster or earlier,” Thinkific CEO Greg Smith told BIV in April.
“Being a public company gives us a greater platform to attract, retain and compensate exceptional people.”
Meanwhile, Clio CEO Jack Newton said the pandemic has served as an accelerant for industries previously reluctant to go digital.
“Starting around mid-April [2020], we saw an unbelievable surge in demand – what I described as a mass evacuation to the cloud,” he told BIV this past spring.
Raffa said he expects more unicorns to emerge by year’s end.
