Alex Williams for TechCrunch writes: Bill.com, a platform that connects payments and receivables and manages cash flow, has raised $38 million in an oversubscribed round led by new investor Scale Venture Partners.
The round also included participation from Bank of America, American Express, Fifth Third Bank, CheckFree founder Pete Kight, and Commerce Ventures. Bill.com’s previous investors all participated in the funding, which now brings its total raised to $80 million.
The funding round is significant, considering the number of financial institutions participating in the financing. CEO and Co-Founder René Lacerte said in an interview yesterday that banks process electronically about 80 percent of consumer payments while businesses do just 20 percent. But the business sector is gaining momentum and the banks want to leverage that adoption. The problem: they don’t have the expertise or the focus as a business to manage the messy connectivity required for managing complex data workflows. With Bill.com they can provide customers with the services needed to automate back-office operations.
The Bill.com platform uses APIs to connect banks and accounting services such as Xero. The service helps customers collaborate to create connections that encompasses an ecosystem of partners and application partners tha are connected through a network of data pipes that filter data accordingly. Until recently this data has largely been cemented in spreadsheets, invoices and other traditional back-office means of doing business.
Providing services for payables, receivables and cash management rests at the core of what the company provides its customers and it will invest accordingly with the new funding. For payables, as an example, Bill.com will add more features for the larger companies it is attracting to its platform. In terms of receivables, the company will integrate with CRM providers to allow sales orders to be turned into invoicing through the Bill.com platform. It will also enable customers to extend their own platforms to their clientele and, by default, build out the Bill.com service. Additionally, cash flow capabilities will be enhanced with more visualization features.
The Bill.com platform is the company’s greatest challenge but also its greatest asset. As it grows, the platform will also have to be fortified. Like with any SaaS, that means tradeoffs and a slower rate of development, which exposes it to competition in the form of younger, nimbler competitors.
Bill.com has developed a service that abstracts the deep complexity of back-office operations. That level of automation gives it the capability to be at the forefront of the digital transformation of business commerce. Its challenge is staying ahead and not getting bogged down with an information architecture that slows development too much.
With hefty funding, Bill.com has room to grow, but it is still a ways from reaching a milestone such as an IPO, It will have to boost revenues in face of deep competition from the likes of Netsuite, QuickBooks and Concur, all established players with deep market penetration.
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Bill.com Picks Up Another $38M Funding
Brian Kepes for Forbes writes: Bill.com, a cloud-based vendor delivering an integrated set of invoicing based workflow today announced it has secured another $38M in funding to take the total of venture funding it has raised thus far to $80M. The funding comes from previous backers August Capital, Napier Park Global Capital, TTV Capital, Jafco Ventures, Emergence Capital and DCM and also includes new funders Scale Venture Partners (ScaleVP). Interestingly it also attracted some financial industry backers in the form of Bank of America, American Express, Fifth Third Bank, Pete Kight, founder of CheckFree, and Commerce Ventures
Bill.com offers a number of different features, all aimed at helping businesses manage their accounting – bill payment, invoicing and cash flow features are all included in the application. Since its founding seven years ago, the company has grown from strength to strength – it now manages more than 10 million bills per year across its payments, workflow and document management functions. It’s also seeing over half of its customers move from predominantly check based payments to ePayments – a fact that will have helped get the banking industry funders over the line.
Bill.com’s Banking Platforms allows banks to integrate directly with Bill.com – unlike traditional solutions which take an invoice-based perspective on cashflow, Bill com enables banks to be part of the entire cash flow management process – across payables, receivable and cash flow projections – this de-risks the role of the banks, as well as providing an added value service between banks and their customers.
Cashflow is one area that is still a major problem for businesses, especially small and mid-sized ones. The traditional accounting vendors really haven’t managed to build good cash flow forecasting tools, and even the new accounting vendors such as Xero, do little in the way of cash flow forecasting. Having a vendor focused solely on invoice life-cycle management gives the opportunity for this difficult area to once and truly be solved.
The jury is out however on whether these sort of tools are viable as standalone products or whether, over time, they’ll be subsumed into the accounting tools. While Bill.com’s funding to date is generous, it still leaves it the options of either trying to scale a standalone company, or be acquired at a reasonable price that is palatable for the acquirer, and still leaves the investors feeling satisfied. Time will tell which direction proves the right one for this company.
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