Docyt, a startup that offers an AI-powered accounting automation platform for small and medium-sized businesses (SMBs), today announced that it has raised an $11.5 million Series A funding round led by Lobby Capital, with participation from First Rays Venture Partners, which led the company’s 2021 $1.5 million seed extension round, and Morado Ventures.
The idea behind Docyt, which started out as a secure document sharing platform, is to make it easier for SMBs to manage routine accounting tasks like collecting data, digitizing receipts, categorization and reconciliation. It’s basically an end-to-end platform for accounting workflows that automates the financial and accounting back office. Users simply connect their bank accounts and then scan or email their receipts, bills and revenue statements for Docyt’s AI engine to extract this data and then reconcile it with their bank and credit card transactions and update their accounting ledger in as close to real-time as possible.
“Docyt’s goal is to generate financial reports for our customers. It is not piecemeal automation that just does one workflow and then expects somebody else to do the accounting,” said Docyt co-founder and CEO Sidharth Saxena. “The job of the system is to generate actual reports so that the business owners can make critical decisions.”
Since raising its last funding round, the Docyt team launched a number of new integrations with existing revenue systems as it built out its platform. One vertical the company has especially focused on is hospitality, with many accounting systems for hotels still using rather antiquated software and PDF-based receipts. Because its AI system automatically learns how to interpret these documents, it’s relatively easy for Docyt to enter these new markets.
“The last two years were perhaps some of the most difficult for small and medium businesses. They had to first survive and then emerge out of this depression for small businesses,” said Docyt co-founder and CEO Sidharth Saxena. “What we have seen is businesses that took advantage of modern technology fared better than others. They were able to find new lending, they were able to make use of government programs faster, and they were able to put their workforce to use in a much better way. Docyt actually fits into that picture and story really, really nicely. We are accelerating the digital transformation trend.”
That seems to be working out for Docyt as the company also today announced that it grew its revenue by 6x and grew its customer base by 4x in 2021.
“Docyt’s AI-powered financial workflows and accounting automation give small and medium-sized businesses powerful tools to run their back office,” said Eric Carlborg, general partner at Lobby Capital. “We’re thrilled to be part of Docyt’s mission to disrupt the accounting software market by providing businesses with financial visibility, across all locations, in real time.”
The company plans to use the new funding to expand its team, with a focus on its go-to-market capabilities.