One of the most significant pain points for startups and small businesses is keeping up with back-office tasks such as bookkeeping and managing taxes. QuickBooks, it seems, just doesn’t always cut it.
Three-time co-founders Waseem Daher, Jeff Arnold, and Jessica McKellar formed Pilot with the mission of affordably providing back-office services to startups and SMBs. With over 1,000 customers, it has gained serious traction over the years. And Pilot has now also received validation from some big-name investors. On Friday, the company announced a $100 million Series C that doubles the company’s valuation to $1.2 billion.
Bezos Expeditions — Amazon founder Jeff Bezos’ personal investment fund — and Whale Rock Capital (a $10 billion hedge fund) co-led the round, including participation from Sequoia Capital, Index Ventures, Authentic Ventures, and others.
Stripe and Index Ventures co-led Pilot’s $40 million Series B in April 2019. The latest financing brings the company’s total funding raised to over $158 million since its 2017 inception.
The founding team certainly has an impressive track record, having founded and sold two previous companies: Ksplice (to Oracle) and Zupli (to Dropbox).
The pilot’s pitch is about more than just software. The company combines its software with accountants to do things such as provide “CFO Services” to SMBs without a full-stack finance team. It also offers monthly variance analysis for all its bookkeeping customers, essentially serving as a controller for those companies, so they can make better budgeting and spending decisions.
It also helps companies access small business tax credits they may not have otherwise known about.
Last year, Pilot completed more than $3 billion in bookkeeping transactions for its customers, ranging from pre-revenue startups to larger companies with more than $30M of revenue a year. Customers include Bolt, r2c, and Pathrise, among others.
The pilot has also inked several co-marketing partnerships with American Express, Bill.com, Brex, Carta, Gusto, Rippling, Stripe, SVB, and Techstars.
Ironically, Pilot says it aspires to the “AWS of SMB back office.” (In fact, co-founder Waseem Daher started his career as an intern at Amazon). Put simply, Pilot wants to take care of all those back-office tasks so companies can focus more on growth and winning business.
According to Daher, the pilot strives to offer an “exceptional customer experience,” which is reflected in the fact that over 80% of the company’s business is driven by customer referrals and organic interest.
Whale Rock Partner Kristov Paulus said that white-glove customer service experience and Pilot’s “carefully-engineered” software make a powerful combination.
“We look forward to supporting Pilot in their vision to make back-office services as easy-to-use, scalable, and ubiquitous as AWS has with the cloud,” he said.
Pilot’s model reminds me a lot of that of ScaleFactor’s, an Austin-based startup that raised $100 million in a year before it crashed and burned. But the difference, in this case, is that Pilot seems to have satisfied customers.