A.I. and New Rules for Accounting Are an Opportunity for Start-Ups

“Pennylane, a French company, has gained market share in its home country by helping accountants work with clients. It’s aiming to expand internationally.

 

For years in France, accountants have been more than just number crunchers, instead serving as important advisers to businesses of all sizes.

 

But artificial intelligence and a wave of new regulations are forcing the profession to adapt to an evolving world where balancing companies’ ledgers isn’t enough.

 

It is a change that software start-ups are seeking to capitalize on.

 

Among them is Pennylane, a six-year-old upstart whose bookkeeping software is now used by roughly a third of France’s small or medium-size businesses. Its success has driven its ambitions of expanding across Europe and has drawn the attention of big investors, who valued the company this year at about $4.25 billion.

 

“We think we can build a 500 billion-euro company,” Arthur Waller, a founder of Pennylane and its chief executive, said in an interview.

 

Pennylane aims to inject modern efficiency into a historically hidebound profession. Traditionally, businesses compiled financial information, sometimes gathered from scores of paper documents, and sent it to their bookkeepers through an array of unconnected software.

 

The result was often an out-of-date picture of a company’s finances.

 

And for years, the industry has been dominated by a handful of big companies, including Cegid and Sage, that sold bookkeeping as part of expansive and expensive software packages.

 

Pennylane offers what it likens to a financial operating system. Companies and their accountants work from the same platform — “a single source of truth,” according to Quentin de Metz, one of the company’s founders and its chief technology officer — to produce a quick and accurate readout of a business’s numbers.

 

The company, which is named for the Beatles song and began life with a small in-house accounting business, quickly switched focus to selling software to accountants. It pitches itself as an indispensable tool for accounting firms and ultimately for their clients.

 

Nearly all of the company’s business customers come through their accountants.

 

“People told us, Please don’t build something that will get rid of my accountant,” Mr. Waller said.

 

The company also adopted a charter with accountant-friendly policies, including a cap on price increases and a refusal to help customers switch accounting practices without their bookkeeper’s permission.

 

Pennylane’s tools have produced tangible benefits, said Laurent Lamoureux, the head of accounting services at BDO France, who first began using the start-up’s software four years ago.

 

Bookkeepers can process clients’ ledgers much more quickly and cheaply, while customers can more easily get a handle on their day-to-day financial health.

 

Pennylane now has about 1,200 employees and hit 200 million euros, or $224 million, in annual recurring revenue. It has raised roughly $460 million from investors including Sequoia Capital, Capital G and Blackstone.

 

“When it comes to A.I. accounting, they are by far the most exciting company globally,” Luciana Lixandru, a partner at Sequoia, said in an interview.

 

National and European Union regulations may give companies like Pennylane another boost.

 

Last month, France began requiring many businesses to start receiving and issuing electronic invoices for tax purposes, using approved platforms to process the data. Thanks to its tight relationship with accountants, Pennylane says, it has about 20 percent of the e-invoicing market in France.

 

Pennylane is also moving into other countries, starting with Germany, where it has signed up nearly 1,000 businesses. Spain and potentially Britain are future targets as well, with Pennylane aiming to serve multinational businesses wherever they operate.

 

“We think we have an opportunity to create a European giant,” Mr. Waller said.

 

But rivals aren’t standing still.

 

Sage’s chief executive, Stephen Hare, told analysts last month that the software company was seeing “increasing traction” in e-invoicing. And Qonto, a fast-growing French banking start-up, has quickly emerged as a rival, buying up several accounting businesses.

 

Competition is increasingly making e-invoicing a loss leader that’s basically being given away, Mr. Lamoureux said.

 

For Mr. Waller and Mr. De Metz, the solution is to expand Pennylane’s higher-margin offerings, including banking services, inventory management and more.

 

The company is also adding A.I. features, including software that can automatically prefill tax returns and vibe-coding services so that customers can create their own tools on its platform.

 

The strategy speaks to a growing fear among accountants, according to Mr. Lamoureux: that they will be commoditized by technology. If practitioners don’t essentially become C.F.O.s of sorts for their clients, he said, “we are really dead in three years.”

 

Pennylane’s biggest opportunity, according to Mr. Waller, is persuading accountants that it can help with that.

 

“There will be automation,” he said. “You have a couple of years to demonstrate your value.”” [1]

 

1. A.I. and New Rules for Accounting Are an Opportunity for Start-Ups. Michael J. de la Merced.  New York Times (Online) New York Times Company. Oct 23, 2026.