French fintech startup Pennylane has secured €75 million ($83 million) in a funding round that doubles its valuation to €2 billion, signaling strong investor confidence in its cloud-based accounting platform.
The investment round was reportedly led by Sequoia Capital, along with participation from Alphabet’s CapitalG, Meritech, and others, according to an update from CNBC.
Founded in 2020, Pennylane offers an “all-in-one” solution tailored for small to medium-sized businesses (SMBs) and their accountants, featuring tools for expensing, invoicing, cash flow management, and financial forecasting.
CEO and co-founder Arthur Waller described the platform as a modern alternative to established players like QuickBooks and Xero, specifically adapted to meet the needs of continental European accountants, starting with France.
Currently serving 4,500 accounting firms and over 350,000 SMBs, Pennylane has grown steadily since its last valuation of €1 billion in 2024.
The fresh capital from the funding round will fuel its ambitious expansion into Europe, with Germany as the first target this summer.
Waller acknowledged the challenge ahead, noting it took five years to mature the product in France, but he aims to achieve similar success in Germany within two years.
Pennylane’s financial outlook seems promising.
Waller projected the company will reach €100 million in annual recurring revenue by year-end and achieve breakeven, a feat that is said to be supported by its lean customer acquisition costs.
With 75% of expenses dedicated to research and development, the startup is heavily investing in innovation, particularly artificial intelligence (AI).
Waller told CNBC:
“Because we have a modern tech stack, we’re able to embed all kinds of AI, but also GenAI, into the product.”
This includes building an AI-powered “co-pilot” to automate bookkeeping and enhance advisory services for accountants.
The company is also capitalizing on regulatory shifts, such as France’s upcoming e-invoicing mandate, which Waller called a “huge market.”
Luciana Lixandru, a Sequoia partner and Pennylane board member, echoed this optimism, highlighting the “massive market opportunity” in a fragmented, under-digitized accounting sector.
To support its growth, Pennylane plans to increase its workforce from 550 to 800 employees by the end of 2025.