Vertical marketplaces continue to be a key lynchpin in the digital economy, a centralized place where people providing certain goods or services can connect with those specifically looking to buy them, a position that has, it seems, become even more prominent and in-demand in our pandemic economy. In line with that trend, today a startup out of Denmark called Ageras Group, which has built a dual-purpose platform, providing both accountancy software and a marketplace for small and medium businesses to find accountants, is announcing a round of growth funding to expand its business.
The Copenhagen-based company has closed a round of $73 million from a single investor, Lugard Road Capital.
Ageras is not disclosing its valuation, but this report in Danish publication Borsen pegs it at 1.5 billion Danish krone, or around $244 million at today’s rates. We’ve asked an Ageras spokesperson to confirm the figure and will update this post as we learn more.
We’re also asking how much it has raised in the past. Founded in 2012, the startup was bootstrapped for its first five years, and PitchBook discloses only around $220,000 before this round. Previous investors include Investcorp — which took a majority stake in the company in 2017 — and more recently Rabo Bank.
The new investment comes on the heels of good growth for the company, with plans to capitalize on that. Ageras has now passed 340,000 users across Denmark, the U.S., Sweden, Norway, Holland and Germany. It says that the plan will be to use the funding to expand into what it generally describes as “growth markets” — new countries, new customer segments and also adding more services to its software stack — both through organic growth and acquisitions.
“Ageras has established a market leading and best-in-class product offering that is optimally positioned for international expansion and the rising demand for automated business tools,” said Rico Andersen, Ageras’ CEO who co-founded the company with Martin Hegelund, himself a serial investor who has backed the likes of Slack. “This latest financing round will support our ongoing commitment to scaling the Ageras brand and bringing our software offering to new customers across the globe. We look forward to continuing the Ageras story in the years to come.”
Ageras today follows a fairly typical labor marketplace model: SMEs seeking accountancy services submit their requirements in three areas — accounting, bookkeeping or auditing — and in return they receive three leads to contact. That model is one that Andersen and Hegelund know well, having previously built an online marketplace for home service professionals called “Fa det Gjort” (which translates to “Get it done!”).
Alongside this — and to further diversify the business model — the company has expanded into building accounting software, starting first with its own in-house Meneto suite, and then adding to it with two acquisitions, Billy in Denmark and Tellow in The Netherlands.
The investment underscores the persistent popularity of the marketplace model for online business, made popular in e-commerce by the likes of Amazon and Alibaba but extended to a range of services as well.
The labor marketplace model has been a perennial one in the world of startups — Uber helped pioneer it to connect those needing a ride with mobility options for getting somewhere, the likes of Deliveroo lets people sign up to deliver food and other goods to people, there are a number of platforms out there providing a way for tradespeople to connect with those needing a home or other job done, and so on.
And the evolution of that to expand to more knowledge worker jobs is not especially new, either. Upwork, Bark, Paro and others are among those offering a way for accountants to connect with would-be customers.
What is perhaps more notable is how the space seems to be growing right now: the pandemic has reduced a lot of foot traffic for business districts, changing what “offices” look like these days. That has opened the door to a wider range of people providing services to others, while at the same time possibly made it harder for them to be discoverable.
Marketplaces are one way to solve that challenge, and in that regard, it’s no surprise to see the reports that LinkedIn is eyeing up building its own marketplace for skilled workers.
That is not the only area where Ageras faces competition, though: in the area of online accounting services, meanwhile, there are a number of players, including established companies like Intuit as well as newer entrants like Pennylane, TaxScouts, Zeitgold and Stripe-backed Pilot.
Lugard appears to be a VC affiliated with U.S. hedge fund Luxor Capital Group and it has also backed the delivery platform Glovo, inRiver and others. Investcorp, meanwhile, continues to hold a significant stake in the startup as part of its bigger tech investment strategy, which has included acquiring and then selling security firm Avira, and recently taking a stake in India’s logistics startup Xpressbees.
“The combination of Ageras’ mission critical software, backed by a reputation for dependability, insights into the professional service market, an outstanding management team, paired with its cutting-edge research & development has ensured it has continued to grow its market position and deliver an accountancy ecosystem based on high quality recurring revenue,” said Gilbert Kamieniecky, MD and head of Investcorp’s technology vertical, in a statement. “The additional financing secured by Ageras will help to drive international expansion and support the continued innovation of its customer offering.”