French startup Indy has just closed a new funding round of $44 million (€40 million) with BlackFin Capital Partners leading the round. Indy started as an automated accounting platform for freelancers and other self-employed people.
But the company is slowly transforming its product to become an all-in-one platform for freelancers, from accounting to company creation, tax preparation, invoicing and (soon ) business banking. This is an interesting example of the positive effects of binding a software-as-a-service company. And it will inspire other entrepreneurs who are responding to a very fragmented market of potential customers.
As long as you run a company without employees, Indy wants to offer all the administrative and financial tools you need to manage your business. It is designed for freelancers, self-employed people, doctors, architects, lawyers, etc.
Other investors in the recent funding round include La Maison and iXO. Indy closed its funding round this summer. While the startup does not want to share its valuation, the company says it is higher than the company’s valuation after the previous €35 million funding round ($38.3 million at the current exchange rate).
Indy’s main feature remains the automated accounting feature. When you create an account, you can automatically start synchronizing your bank account with Indy so that past and future transactions are automatically captured.
After that, Indy tries to automatically categorize each transaction. In some cases, users need to indicate the type of transaction in the app. Customers add a receipt to each transaction — VAT is automatically detected and receipts are then automatically archived and can be used in the event of a tax audit.
At the end of the year, Indy can fill out tax forms and send them directly to the corporate tax administration. Similarly, Indy handles VAT returns.
Indy’s accounting tools are free to use forever. When you want to generate tax forms and submit them, you must pay a monthly subscription. But it remains cheaper than hiring an accountant.
“As we are usually four to five times cheaper than a chartered accountant for the tax preparation part, there are many people who use our free services and who also subscribe to our paid services. But it’s up to them, they can also decide to hire an accountant,” Indy co-founder and CEO Côme Fouques told me.
Product integration playbook
With this simple product positioning, Indy was able to convince thousands of paying subscribers. But the company is not standing still as it launches other products to make Indy a product suite.
For example, you can now create quotes and invoices from Indy and store them in your user account. Of course, you can always use Word or Excel for these documents, but there are some benefits to having the documents in Indy directly. For example, if a client pays an invoice using a bank transfer, Indy can automatically mark that invoice as paid.
Similarly, before you can use a product like Indy, you need a company with paying customers. In France, even if you are a part-time freelancer looking for extra income, there is some paperwork involved and there are many options.
Getting started will help you make the right decisions when you’re creating your company. Unlike the company’s traditional production services, Indy offers this service for free as long as you start a subscription – but you can cancel the subscription whenever you want.
These products increase the stickiness of the product and users are more likely to recommend Indy to other self-employed people. In the same way, the sales funnel works especially well as a good part of the people who want to become freelancers should first choose a company creation service.
The next step is clear: Indy will become a fintech startup. In just a few months, the startup will offer a free business bank account with a payment card. Again, it makes sense to bundle this service as current customers need to switch between their banking app and Indy to manage their business finances.
Current companies working in business banking, such as Qonto and Shine in France, focus heavily on small and medium companies. They don’t have a basic product offering with basic features that work well for freelancers. “Business banking for a self-employed person is pretty basic – they want to send money by transfer, receive money by transfer, have a payment card, and that’s all there is to it,” Fouques said.
And Indy could use this fintech angle for other services. For example, the company can offer new payment methods for invoices, such as online card payments, QR code-based payments or using a smartphone as a contactless card reader.
“As we offer all the features of the same service, we create huge economies of scale and we save money on user acquisition costs,” Fouques said. “This means we can offer a whole range of services for free – services that would otherwise be paid services elsewhere. At the same time we have a hyper-healthy, hyper-scalable model .”
Other companies have identified the same problem in the US, such as Found and Lili – both have raised around $80 million according to Crunchbase data. Indy cannot compete head-to-head with these well-capitalized companies. Instead, the French startup is looking at other European countries to see if its service can be replicated in other markets.
But Indy is still focused on its home market because there are millions of self-employed people in France. The market opportunity is significant. And it looks like Indy has found the right distribution strategy.