FreeAgent Central, the money management and accounting tool aimed at small businesses, has secured an undisclosed amount of Angel funding for the service – though I understand it’s in the low six figures Sterling. The UK firm came out of beta in February last year and has users across the UK and US. The investors are Christoph Janz, Martin Armstrong and Sebastian Serfas.
Janz co-founded German Internet startup DealPilot back in 1997, one of the first comparison shopping services, funded by Bertelsmann and later acquired by Shopping.com. In 2005 he co-founded Pageflakes the personalizable homepage backed by Balderton Capital and recently acquired by LiveUniverse.
FreeAgent says it is is onboarding customers at a good clip and signing strategic partnerships with professional accountants, both for co-marketing and deeper relationships.
Run out of Edinburgh, FreeAgent Central costs up to £25 per month but in theory you could buy an off the shelf accounting product for £100. Why spend three times as much for software that doesn’t update? It’s built to address ‘spreadsheet hell’ and double entry book-keeping and do all the grunt work in the background while giving your professional accountant the figures needed to prepare regulatory accounts.
It’s also attempting to get into the business of predicting cashflow, and giving a heads up on your tax position before your professional advisor. The UK account for the UK tax regime costs sole traders £15 per month, UK Partnerships/LLPs £20 and Ltd companies £25. The Universal Account can be used by anyone costs US $20 per month and uses all the sites features but without the tax functionality, although this is going to be rolled out.
Competitors in the ‘light-weight invoicing’ and small biz management arena – mainly in the US – include Freshbooks, BillMyClients and Blinksale, but FAC claims it has more features geared to smaller operations and allows freelancers to know their financial position in a more ongoing basis. In the UK there is also Bionicbooks, and ClearBooks – but these seem to be less ambitious in scope.
Founder and CEO Ed Molyneux says Freeagent is seeing more people come from Word and Excel than other competitors, though there is competition from Kashflow.co.uk, also UK-based, and xero.com in New Zealand. He says people are now leaving paid employment and expect more than being handed a spreadsheet by their accountant.
This makes an awful lot of sense to me and should have the likes of Sage and Microsoft on the back foot. Cloud apps like FreeAgent Central are the kind of thing that will lead to a death by a thousand cuts for the incumbents in this business.