Toronto-based startup Wave Accounting is shortening its name and broadening its vision today, with a newly-launched web presence under its new Wave banner. The startup found its footing offering free online accounting service via an ad-supported model, but has since expanded into payroll and invoicing, as well as payment transaction and personal finance. The company feels there’s a much bigger opportunity out there waiting for it beyond the simple scope of its former identity.
While Wave made its reputation on delivering full-featured, free online accounting services to organizations of varying sizes, the company has since been building its reputation in other areas, including via a U.S. payroll product launch earlier this year. The idea is that the company can undercut a lot of other options out there, without sacrificing features, through integrated advertising and select paid products, like the payroll offering, and the online credit card payments it’s using for direct response to invoicing.
“We’ve now brought all of our tools together under the banner of Wave apps,” Wave CEO and co-founder Kirk Simpson explained in an interview. “It’s really about bringing together all sorts of different functionality together into one place for small business owners. We’ve signed up about almost 500,000 small businesses around the world so far, and are adding new ones at a rate of about 1,300 new signups each day.”
Simpson said that through their expansion from accounting into payroll, they realized that users are incredibly frustrated with looking around for a variety of solutions, vs. just going to a single-sourced solution where all the products are tightly integrated. Wave now hopes to be exactly that, and in addition to its existing products, will be launching iOS companion apps to support their payroll software in early 2013, as well as for receipt scanning with OCR and direct input into their accounting products. Wave is on a roll with regards to signups and its funding total, which includes $19 million in VC funding from OMERS Ventures, Social+Capital and others, and it wants that momentum to continue into the new year.
As for the business model, it won’t change with the rebrand: Simpson says the free offerings will remain a core part of the platform, and that freemium will always be the plan for Wave. He says that with products like direct payment transactions and payroll where charging a fee makes sense, they’ll continue to do that, too, and also notes that conversions are very promising in terms of getting customers on board with those products from the existing free ones, though he wouldn’t go into specifics.
Wave is riding a wave of its own making right now, and looks well-positioned to continue to do so. I’ll be interested to see where the company goes with its mobile offerings, as that’s likely to be a key area in terms of helping cloud-based accounting software stay ahead of the needs of small businesses going forward.