Real-time accounting software startup Digits Finance Inc. said today it has raised $65 million in a Series C round of funding led by Softbank, with participation from Harry Stebbing’s 20VC Growth, GV and Benchmark.
The round brings Digit’s total amount raised to $97.5 million, while its valuation has soared to $565 million.
Digits announced the funding alongside the launch of its first product, Digits Reports, which is a live financial reporting tool for small and medium-sized businesses. What’s different about Digits compared to other kinds of accounting software is its interactive nature. Digits Reports provides live reports with built-in analysis and visualizations. Users can “hover to discover”, which means hovering over a particular number on a statement to discover more information about the underlying transaction. Digits Reports also providers multi-dimensional aggregations for accountants to understand key drivers and changes.
Digits Reports is designed to sit atop of Intuit Inc.’s QuickBooks accounting tool, a product that accounts for over 80% of the small business accounting software market in the U.S. It uses the data from QuickBooks to manage a businesses’ incomings and outgoings, acting as a kind of database for the business. The secret is that Digits organizes that data and creates more intelligence around it, so it can provide answers to questions around “how” or “why” that accountants might have when looking at a basic financial report.
Unlike traditional PDF or Excel files, Digits Reports files are fully encrypted, with support for commenting, collaboration and secure sharing, with the ability for file creators to monitor and revoke access. Digits Reports also offered artificial intelligence-powered insights that can help to save users hours of analysis to help them understand what’s going on in their business beyond basic profit and loss statements.
Digits co-founder Jeff Seibert said the company had spent the last three years building the technology required to understand and model business finance in real time.
“We call this the ‘Living Model’,” he said. “Using advanced algorithms and machine learning, Digits automatically understands each business at the object level – its customers, suppliers, bank accounts, employees, and so on – and the transactions between them. This is what makes products like Digits Reports so powerful, yet so intuitive.”
Interestingly, Softbank said it chose to invest in Digits after its software was found to be useful to other companies in its portfolio.
“It’s rare for one of our portfolio companies to be valuable to the others,” said Eylul Kayin, an investor at SoftBank’s Vision Fund. “Digits is useful to all of them.”
The company has also announced a second product, called Digits Reports Builder, which is designed for professional accountants. They can use it to create customized and immersive financial reports for their clients in a short space of time, highlighting the most critical findings.
“We’ve seen accountants using Digits save 3-4 hours per client every month, and when you are closing dozens of books that adds up to hundreds of hours saved,” said Digits’ other co-founder Wayne Chang.
Digits had previously created a tool called Digits Search, a technology demonstration of its underlying platform that organizes company financial data in real-time, making it fully searchable and accessible.