Finance
Pennylane doubles valuation as Alphabet VC fund takes stake
Seksan Mongkhonkhamsao | Moment | Getty Images
French accounting software firm Pennylane has doubled its valuation to 2 billion euros ($2.16 billion) in a new 75 million euro funding round.
Pennylane told CNBC that it raised the fresh funds from a host of venture funds, with Sequoia Capital leading the round and Alphabet’s CapitalG, Meritech and DST Global also participating.
Founded in 2020, Pennylane sells what it calls an “all-in-one” accounting platform that’s used by accountants and other financial professionals.
The platform is primarily targeted toward small to medium-sized firms, offering tools for functions spanning expensing, invoicing, cash flow management and financial forecasting.
“We came in tailoring a product that looks a bit like [Intuit’s] QuickBooks or Xero but adapting it to the needs of continental accountants, starting with France,” Pennylane’s CEO and co-founder Arthur Waller told CNBC.
Pennylane currently serves around 4,500 accounting firms and more than 350,000 small and medium-sized enterprises. The startup was previously valued at 1 billion euros in a 2024 investment round.
European expansion
For now, Pennylane only operates in France. However, after the new fundraise, the startup now plans to expand its services across Europe — starting with Germany in the summer.
“It’s going to be a lot of work. It took us approximately five years to have a product mature in France,” Waller said, adding that he hopes to reach product maturity in Germany in a shorter time period of two years.
Pennylane plans to end the year on about 100 million euros of annual recurring revenue — a measure of annual revenue generated from subscriptions that renew each year.
“We are going to get breakeven by end of the year,” Waller said, adding that Pennylane runs on lower customer acquisition costs than other fintechs. “75% of our costs are R&D [research and development],” he added.
Pennylane also plans to boost hiring after the new funding round. It is looking to grow to 800 employees by the end of 2025, up from 550 currently.
‘Co-pilot’ for accountants
Like many other fintechs, Pennylane is embracing artificial intelligence. Waller said the startup is using the technology to help clients automate bookkeeping and free up time for other things like advisory services.
“Because we have a modern tech stack, we’re able to embed all kinds of AI, but also GenAI, into the product,” Waller told CNBC. “We’re really trying to build a ‘co-pilot’ for the accountant.”
He added that new electronic invoicing regulations coming into force across Europe are pushing more and more firms to consider new digital products to serve their accounting needs.
“Every business in France within a year from now will have to chose a product operator to issue and receive invoices,” Waller said, calling e-invoicing a “huge market.”
Luciana Lixandru, a partner at Sequoia who sits on the board of Pennylane, said the reforms represent a “massive market opportunity” as the accounting industry is still catching up in terms of digitization.
“The reality is the market is very fragmented,” Lixandru told CNBC via email. “In each country there are one or two decades-old incumbents, and few options that serve both SMBs and their accountants.”
JPMorgan Chase CEO Jamie Dimon said Monday that tariffs announced by President Donald Trump last week will likely boost prices on both domestic and imported goods, weighing down a U.S. economy that had already been slowing.
Dimon, 69, addressed the tariff policy Trump announced on April 2 in his annual shareholder letter, which has become a closely read screed on the state of the economy, proposals for the issues facing the U.S. and his take on effective management.
“Whatever you think of the legitimate reasons for the newly announced tariffs – and, of course, there are some – or the long-term effect, good or bad, there are likely to be important short-term effects,” Dimon said. “We are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products.”
“Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,” he said.
Dimon is the first CEO of a major Wall Street bank to publicly address Trump’s sweeping tariff policy as global markets crash. Though the JPMorgan chairman has often used his platform to highlight geopolitical and financial risks he sees, this year’s letter comes at an unusually turbulent time. Stocks have been in freefall since Trump’s announcement shocked global markets, causing the worst week for U.S. equities since the outbreak of the Covid pandemic in 2020.
His remarks appear to backtrack earlier comments he made in January, when Dimon said that people should “get over” tariff concerns because they were good for national security. At the time, tariff levels being discussed were far lower than what was unveiled last week.
Trump’s tariff policy has created “many uncertainties,” including its impact on global capital flows and the dollar, the impact to corporate profits and the response from trading partners, Dimon said.
“The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse,” he said. “In the short run, I see this as one large additional straw on the camel’s back.”
‘Not so sure’
While the U.S. economy has performed well for the past few years, helped by nearly $11 trillion in government borrowing and spending, it was “already weakening” in recent weeks, even before Trump’s tariff announcement, according to Dimon. Inflation is likely to be stickier than many anticipate, meaning that interest rates could remain elevated even as the economy slows, he added.
“The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and ‘trade wars,’ ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility,” Dimon said.
Dimon also struck a somewhat ominous note considering how much U.S. stocks have already fallen from their recent highs. According to the JPMorgan CEO, both stocks and credit spreads were still potentially too optimistic.
“Markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing,” Dimon said. “I am not so sure.”
This story is developing. Please check back for updates.
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