Wave Accounting Launches Integrated Small Business Tools, Rebrands Simply as ‘Wave’

From Christine Dobby  @ Financial Post.com:  It started with free online accounting, but Toronto’s Wave Accounting Inc. is moving to position itself as a comprehensive tool for small businesses with everything from payroll management to invoicing and to — of course — accounting, all in one package.

The startup, which has raised more than $19-million in venture funding and grown to almost 80 employees, is rebranding itself as simply ‘Wave’ and angling to take on larger competitors like Intuit’s QuickBooks.

It is launching an integrated portfolio of all of its tools on Monday — all housed at a new site: Waveapps.com — and adding new features including a payment processing tool aimed at reducing the hassle and expense of credit card transactions for small businesses.

“We started the company as Wave Accounting three years ago and had a vision for doing that aspect of the back office better,” said Kirk Simpson, co-founder and CEO. “The vision has expanded just based on customer feedback about what they were looking for us to tackle. With that has come this new focus on expanding the horizon and quite frankly getting accounting out of the name of the company and the URL for that reason.”

Previously its online accounting tool and payroll product (which it charges a fee for) were related but separate apps.   “The big thing here is a simplified, unified application that handles the back office,” Mr. Simpson said.   Everything will remain free (its business model is based on small-business-related brands like American Express and Grand & Toy offering targeted deals to its users) except for its payroll app and the payment processing, for which there will be a fee of 2.9% per transaction.

Wave now has almost 500,000 customers and is adding new ones at a rate of about 1,300 per day, Mr. Simpson said.    Its head office is in Toronto and it also has employees in Winnipeg, Vancouver and Rochester, New York (the New York-based employees work primarily on the U.S. payroll side of the business).   It raised US$12-million in May, in a series B round led by the Social+Capital Partnership, a venture fund based in Palo Alto, Calif. In August Wave acquired Montreal stock analysis startup Vuru.co.

ExactCPA Comment:  Wave is positioning itself to take on accounting software giant Intuit.  Like Intuit, it is expanding into markets outside of its core accounting application.  Unlike Intuit, most of its applications are free.

It's great to see small companies like Wave and Xero giving Intuit and its Quickbooks platform a run for its money.  According to the Intuit website, they claim to have over 85% of the retail marketshare for business accounting software.  This will prove to be an uphill battle for any competitor.  However, with the technological advances related to cloud applications, I believe that the playing field is a little more level.