Softbank leads $65M Digits funding

Digits, a startup building real-time accounting tools for small and medium-sized businesses, raised $65 million in Series C funding at a valuation of $565 million.

Why it matters: The total addressable market is huge, which is why VC money is pouring into the spend management and corporate card sector — even when the company doesn’t yet have a revenue-generating product in market.

• The round was led by SoftBank, with Harry Stebbings’ 20VC Growth, GV (fka Google Ventures), and Benchmark participating.

How it works: The Digits platform plugs into SMBs’ existing accounting and banking systems to provide a real-time dashboard into their financial activity.

• Founded in 2018, the company launched its first product — Digits Search — last year, which lets companies view all of a company’s transactions, categorized.
• Digits Reports, which the company is just now launching, allows accountants to create and customize P&L reports for their SMB clients.
• Both products connect to (and sit on top of) a company’s existing accounting software like Quickbooks and their bank account, enabling a real-time view of what’s happening.

Of note: Digits’ Search and Reports are currently free to use, and Digits has yet to announce pricing for future products but it plans to bill on a SaaS basis.

Between the lines: Digits was founded by Jeff Seibert and Wayne Chang, who built the mobile analytics tool Crashlytics — which they sold to Twitter in 2013.

• “Through the process of building that company, we were stunned by the difference between the tools available to the product side and the finance side,” Seibert tells Axios.
• The product team had Google Analytics, real-time dashboards, A/B testing, and performance data — while on the finance side, the company waited weeks for its accountant to send a PDF or Excel report of its finances each month.

State of play: Digits’ fundraise comes just days after corporate card company Ramp raised $200 million in funding at an $8.1 billion valuation, and international competitor Jeeves raised $180 million at a valuation of $2.1 billion.

• But the Digits team is approaching the market from a totally different perspective: “We fundamentally think that starting with cards is kind of backwards because then you can only manage the spend on that one card,” Seibert says.