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Index Ventures, Stripe back bookkeeping service Pilot with $40M

Five years after Dropbox acquired their startup Zulip, Waseem Daher, Jeff Arnold and Jessica McKellar have gained traction for their third business together: Pilot.

Pilot helps startups and small businesses supervise their back office. king executive officer Daher admits it may seem a small boring, but the mart opportunity is undeniably enormous. To tackle the mart, Pilot is today announcing a $40 million successions B led by Index Ventures with participation from Stripe, the online payment processing system.

The circular values Pilot, which has raised about $60 million to date, at $355 million.

“It’s a massive industry that has sucked in the past,” Daher told TechCrunch. “People want a really high-quality solution to the bookkeeping problem. The mart really wants this to exist and we’ve assembled a world-class team that’s capable of knocking this out of the park.”

San Francisco-based Pilot launched in 2017, more than a decade after the three founders met in MIT’s student computing team. It’s not surprising they’ve garnered attention from adventure capitalists, given that their first two companies resulted in notable acquisitions.

Pilot has taken on a massively overlooked but strategic segment β€” bookkeeping,” Index’s Mark Goldberg told TechCrunch via email. “While dry on the surface, the opportunity is gigantic given that an estimated $60 billion is spent on bookkeeping and accounting in the U.S. alone. It’s a service industry that can finally be automated with technology and this is the awesome team to take this on β€” third-moment founders with an awesome combo of financial acumen and engineering.”

The trio of founders’ first project, Linux enhance app named
Ksplice, sold to Oracle in 2011. Their next business, Zulip, exited to Dropbox before it even had the chance to publicly launch.

It was actually upon construction Ksplice that Daher and team realized their dire need for tech-enabled bookkeeping solutions.

“We built something internally like this as a byproduct of just running [Ksplice],” Daher explained. “When Oracle was acquiring our company, we met with their finance people and we described this system to them and they were blown away.”

It took a few years for the team to refocus their efforts on streamlining back-office processes for startups, opting to build business chat app in Zulip first.

Pilot’s app integrates with other financial services products to bring the bookkeeping process into the 21st century. Its platform, for instance, works seamlessly on top of QuickBooks so customers aren’t wasting valuable moment updating and managing the accounting application.

“It’s good than the sedate, painful process of doing it yourself and it’s good than hiring a third-party bookkeeper,” Daher said. “If you care at all about having the work be high-quality, you have to have app do it. People aren’t good at these mechanical, repetitive, formula-driven tasks.”

Currently, Pilot handles bookkeeping for more than $100 million per month in financial transactions but hopes to use the infusion of adventure funding to speed customer adoption. The company also plans to launch a tax prep benefaction that they say will make the tax prep experience “uncomplicated and seamless.”

“It’s our first foray into Pilot’s larger adventure, which is taking care of running your companies entire back office so you can focus on your business,” Daher said.

As for whether the team will trade to another gigantic acquirer, it’s unlikely.

“The opportunity for Pilot is so enormous and so substantive, I think it would be a mistake for this to be anything other than an enormous and enduring public company,” Daher said. “This is the company that we’re going to do this with.”

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TechCrunch
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