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Tracking fintech, banking & financial services innovations since 1994
Cloud accounting platform FreeAgentteamed up with Starling Bank this week. The partnership aims to make business banking easier for Starling’s business and freelancer clients.
As Roan Lavery, FreeAgent co-founder and CPO said in the announcement, “This integration allows Starling customers to link their bank account with FreeAgent, pulling in transactions on a daily basis. From there, these transactions can be reconciled as normal.”
Starling said the impetous of the partnership was the increased demand for business banking services the bank experienced after a successful integration with FreeAgent competitor Xero in November of last year. Starling said it hopes the new integration will reduce stress levels for small businesses, which can sync their Starling business bank accounts with FreeAgent as of this week.
Here’s how it works– once businesses give FreeAgent consent, data associated with the business’ Starling account, including transaction time, spending category, and transaction name, is pulled over to the FreeAgent platform. By syncing both historic and current transaction data automatically, businesses can spend less time on manual data entry and benefit from more accurate reports.
Founded in 2007, FreeAgent offers cloud accounting services to help small businesses and freelancers manage their accounts. The U.K.-based company provides an API for easy integration, and works with existing startups such as Basecamp, Stripe, PayPal, and Xpenditure. The company also has an offering for accountants, a sales tax reporting tool, a fully-integrated payroll system, and freelancer tools such as time tracking and a project profitability estimator.
FreeAgent CEO Ed Molyneux debuted FreeAgent’s Financial Health Insights at FinovateEurope 2013 in London. In 2016, the company went public and, last year, was acquired by RBS in an offer valued at $75 million (£53 million).
Cloud accounting platform FreeAgent has agreed to a takeover bid from the Royal Bank of Scotland this week. CEO Ed Molyneux and the rest of the board have accepted the offer, which values FreeAgent at approximately $75 million (£53 million).
In a blog post announcement, Molyneux said that the acquisition will allow the company to progress toward its vision and improve the FreeAgent platform for both customers and partners. “As part of a larger organisation we want to accelerate our growth ambitions in the micro-business and accountancy practice space, as well as significantly improve our core product,” he added.
This agreement comes just over a year after FreeAgent began working with RBS. The two formed a distribution partnership last January in which RBS offered FreeAgent’s accounting software services to its small business clients. The deal will help both parties leverage new opportunities to offer a more integrated banking and accounting experience for small businesses since, as Molyneux said, “the lines between banking, accounting and tax are becoming increasingly blurred.”
After the deal is closed, FreeAgent will continue to operate business as usual. In a Q&A, Molyneux said the company has “no intention of significantly changing the way that [it does] business with [its] customers.” FreeAgent shareholders will receive $1.70 (120 pence) per share. This represents an 86% premium to yesterday’s share price and a 43% premium to the IPO price of $1.19 (84 pence).
Founded in 2007, FreeAgent offers cloud accounting services for small businesses, an API for easy integration, and integrations with existing startups such as Basecamp, Stripe, PayPal, and Xpenditure. The company also has an offering for accountants and a fully-integrated payroll system.
Molyneux debuted FreeAgent’s Financial Health Insights at FinovateEurope 2013 in London. Since then, the company went public in 2016 and last month launched the Customer Sales Report, which allows businesses to see how much income they’ve received from each customer.
“We’re absolutely thrilled to have been chosen from over 30 vendors to help and support Royal Bank of Scotland and NatWest’s business customers,” FreeAgent CEO Ed Molyneux wrote on the company blog. “By moving onto the FreeAgent platform, we hope life will become easier for these small businesses (who in many cases have to do their accounting themselves) by allowing them to concentrate on running their businesses.”
Pictured: Ed Molyneux, founder and CEO of FreeAgent, demonstrating his company’s SaaS accounting solution at FinovateEurope 2013 in London.
As part of the partnership, FreeAgent’s technology will be connected to the business bank accounts of RBS and NatWest customers. The company’s platform – already used by 50,000 businesses – helps small businesses, entrepreneurs, and freelancers manage invoices, expenses, taxes, projects, and more. In December, FreeAgent launched a variety of new features for its mobile app, FreeAgent Mobile, including a tax timeline and notifications, a profit & loss screen, and a cashflow screen. FreeAgent Mobile is available on both iOS and Android platforms.
Nineteen Finovate alums headquartered in Europe raised $350 million in 2015.
From the $16,000 in seed money raised by U.K. startup, StockViews, to the €82 million investment received by Germany’s Kreditech, we’ve counted every euro, pound, and dollar that investors poured into our European alums. And whether the funding represented an initial infusion of capital or was part of a multi-stage Series E round, it is clear that investors are very interested in the fintech innovations of Europe.
Take a look for yourself at the “European Portfolio” from 2015 below, featuring Finovate alums from the United Kingdom, Ireland, Germany, Switzerland, and the Netherlands.
The news broke this morning in London, and 82 investors have already contributed 36% of FreeAgent’s goal amount (as of 7:19 p.m. GMT). The company has 60 days to raise the remaining funds.
If investors contribute the remaining 64% (approximately $1 million) within 60 days, FreeAgent will use the funds to accelerate product development and acquire more micro-business and freelance customers. The company raised $5 million in debt financing in April and is currently valued at $47 million (£30 million).
Opting out of a traditional venture capital round, the Edinburgh-based company crowdsourced the funding to enable its 40,000 customers to invest, and to potentially attract more small business owners and accountants. Investors can take a stake in FreeAgent from as little as $16 (£10) per share.
FreeAgent co-founder/CEO Ed Molyneux says “who [is] better to help us achieve our vision of ‘democratizing accounting’ than our customers? We chose crowdfunding because we want to make it straightforward for them—as well as other small business owners—to invest in FreeAgent.”