PeakSpan's Thesis for Finally | PeakSpan Perspectives
PeakSpan's Thesis for Finally
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March 22, 2022
The PeakSpan team is thrilled to have led Finally’s Series A financing alongside our partners at Clear Haven, Active Capital and 500 Startups. Upon meeting Felix, Glennys, Edwin and the rest of the team — it was clear from the get-go that this is a squad you do not want to bet against. 2021 was a record year for Finally, eclipsing 1,000 customers and setting the stage for an ambitious “Act II” headlined by the largest corporate charge card launch of all time, bringing on new products and team members, and a rebrand (haven’t heard of Finally? that’s because Finally was formerly “Back Office”). Suffice to say, this team’s moment has “finally” arrived and it’s our sincere privilege to be supporting Finally in its next phase of growth and company development.
Finally is a provider of end-to-end finance automation solutions for SMBs. Below is PeakSpan’s thesis:
Finally sits at the intersection of several, powerful macro tailwinds across i) SMB digitization, ii) accounting automation, iii) B2B payments and iv) embedded finance. The Company’s initial value proposition was predicated on providing “do-it-for-me” bookkeeping automation services. Finally boasts impressive gross and net retention, high gross margins and high customer satisfaction scores given the i) fully automated offering, ii) inherently tedious nature of bookkeeping and iii) world-class customer service. This effort is enabled by a software platform, banking and accounting integrations and a team of bookkeeping associates. Finally’s GTM strategy is diversified, targeting both SMBs and accounting firms who altogether form a multi-billion-dollar software market opportunity for the business. However, this opportunity is secondary (in size), to the embedded finance opportunity sitting beneath the surface which Finally will unlock through offering i) a corporate charge card, ii) payments and iii) banking services. This strategy is compelling for several reasons:
- Traditional financial services providers are being eaten by software companies who can now offer the same commodity products (holding cash, issuing cards, transmitting payments) while layering in substantial automation, connectivity, data intelligence; and further can deliver this package of financial and software products through a consumer-friendly UI and with superior customer service
- Opportunity to expand ACV with little incremental CAC (Finally can grab more dollars per $1 of S&M expense). Finally’s capital markets and technology partnerships are robust and is allowing the Company to scale financial products at a rapid place where we can focus on the end-customer experience and let our partners nail banking and credit markets components. Importantly, Finally’s bookkeeping solutions is sticky, making for a compelling LTV:CAC unit economic model when you are able to offer SaaS+FinTech. This also allows Finally to give more value back to the customer, which is our goal — offering more products for lower pricing and/or for free over time.
- Embedded finance products drive further automation in Finally’s core offering, bookkeeping, whereby pre-configured credit cards and direct access to banking and payment details can cut down significantly on transaction reconciliation. We expect the card product to drive up margin and scalability
Finally is positioned to first disrupt the accounting industry through automating tedious bookkeeping services. The Company does this today with high effectiveness and customer-satisfaction. Finally sees limited competition in this segment given the need to offer human-in-the-loop platforms in order to deliver do-it-for-me automation. Finally’s roadmap of embedded financial products attacks a several trillion-dollar opportunities, disrupting traditional financial services providers. Bundling accounting automation, expense management, banking, credit cards and payments for an SMB customer is a highly sticky and superior value proposition with value accruing to both the customer and Finally through better extensibility, data synchronization, and automation. Specifically, the customer gets a one stop shop for all finance and accounting tasks while Finally’s team will benefit from more streamlined bookkeeping reconciliation, driving up our margin and scalability.
There are 5.5M SMBs in the US with between 1 and 500 employees who require services surrounding bookkeeping, payroll, expense management, banking, invoicing, taxes, etc. Between 3M and 5M of these SMBs have no finance support whatsoever and must outsource or leverage DIY solutions to get by.
The bookkeeping market is dominated by QuickBooks, a general ledger (GL). Other widely used GLs in the SMB segment include Xero and FreshBooks. An SMB might pay QuickBooks $500 per year for the GL but will then pay a bookkeeper $5,000 per year to keep it running. This is the market Finally has initially gone after with a bookkeeping automation service. Whether serving the small business directly, or the bookkeeping firm — Finally sits on top of QuickBooks to automate the most cumbersome aspects of bookkeeping with a combination of software and via their team of bookkeeping associates. The Company will be offering additional SaaS products over time such as payroll, expense mgmt., tax and analytics.
Finally’s roadmap of solutions represent attractive upsell and market expansion opportunities, each on a stand-alone basis and have one central theme in common — they tie back to the core value proposition of automating bookkeeping. The first product launch will be corporate charge card, which when leveraged by the SMB, results in automatic expense classification (essentially, cuts out the manual effort currently being expended by the SMB or Finally team) through pre-defining what expense category the card spend should tie back into. Next, Finally plans to roll out business banking. Through being the bank, and the card provider and the expense management provider — the data visibility and cohesion will drastically cut down on reconciliation efforts, improving scalability. Lastly, Finally will one day handle payments which drives revenue and stickiness and will represent further progress towards near-fully automated bookkeeping.
Key Market Drivers
- SMB growth. 32M SMBs in the U.S. and 1M net new SMBs are added each year (3% YoY) and 60% of all employed persons in the US work for an SMB
- The pandemic has forced SMBs to digitize. 72% of SMBs have increased their company’s online presence over the past year
- AI / ML impact on accounting and bookkeeping automation. SMBs and accounting firms who leverage AI/ML will generate significant time and resource savings ( link)
- Bookkeeping is in high demand. 1.7M bookkeepers based in the US today, a figure that continues to decline
- Human-in-the-loop solutions are a must in bookkeeping automation. The bookkeeping automation market is comparable to expense mgmt. and payroll in terms of market attractiveness but has yet to see any $100M revenue platforms. This sector has scaled more slowly due to the need for human involvement
- Enhanced focus on digital payments. 66% of SMB owners said the time to process payments has the largest impact on cash flow. 80% of B2B payments are expected to be digital by 2025.
- AR/AP automation is undergoing a wave of adoption. 49.2% of businesses cite manual AR as a major issue while 48.4% say processing speeds are a an inhibitor
- Corporate charge card market growth. Global corporate charge card market is growing 7%+ per year, reaching $32B by 2026. The U.S. saw $7.5T in card volumes in 2020, of which $1.3T was from SMBs, which despite making up just 17% of the volumes, account for 55% of the revenue opportunity.
- The virtual cards market is growing rapidly. Global B2B virtual card payments are projected to grow from $320B to $553B by 2025
- Business banking. The embedded financial services market is projected to reach $7T in the next ten years
Finally is building the first truly end-to-end, full-stack finance automation platform for SMBs. Attacking an exceptionally large market opportunity with an approach that hasn’t been seen before. Financial software, automated services and embedded financial products, wrapped into a single platform with extensible, easy-to-manage workflows for SMB users.
About Jack Freeman
Jack has worked with growth-stage technology businesses his whole career and has partnered with over 25 portfolio companies at PeakSpan. He currently leads PeakSpan’s FinTech and Supply Chain investment themes. Jack was named to GrowthCap’s Top 40 Under 40 Growth Investors List in 2025. Prior to joining PeakSpan, Jack worked at Stackpop, an early-stage startup, where he helped build a SaaS spend management platform that enabled CTOs and IT teams to buy and manage internet infrastructure. After Stackpop was disrupted by AWS, Jack joined Macquarie Capital, where he spent three years executing software M&A and capital markets transactions for technology businesses.
Jack holds a B.A. in Economics from Middlebury College. Prior to Middlebury, he played Division I soccer at Seton Hall University and for the New York Red Bulls U-23 team. Jack lives in Larchmont, NY, with his wife and two dogs, Willow and Leeuwen. Once a year, Jack captains a team in a charity bike ride to the Hamptons to support his brother’s autism program, Quest, where he has raised over $100K. Since retiring from collegiate soccer, Jack has become an avid endurance athlete, completing five of the “Big Six” World Marathon Majors (London remaining), an Ironman, and a 50-mile ultramarathon. He is currently focused on improving his marathon time from 2:32:30 to sub-2:30.
About Chase Goree
Chase joined PeakSpan Capital in 2021 and has since worked closely with 10+ growth-stage software and technology businesses in the PeakSpan portfolio. Prior to joining PeakSpan, Chase was an investment banker at Houlihan Lokey, where he advised on M&A and private financing transactions across software, internet, FinTech, and tech-enabled services. Chase holds a B.A. in Economics from Middlebury College, where he graduated Magna Cum Laude and with departmental honors while also serving as a member of the men’s lacrosse team. In his free time, Chase enjoys international travel, exercise, cheering on Washington D.C. sports teams, and trying new restaurants in New York City.
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