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French startup Pennylane has raised a $57 million Series B round (€50 million) from existing investors, such as Sequoia Capital, Global Founders Capital and Partech. The startup wants to replace legacy accounting solutions in France — and in Europe.

If you’re an accountant, you might be familiar with tools like Cegid and Sage. Essentially, Pennylane wants to overhaul these tools and modernize the tech stack of accounting firms.

Pennylane connects directly with third-party services that hold valuable information. For instance, you can get banking statements in the Pennylane interface, import receipts from Dropbox and get billing information from Stripe.

And because it’s an online platform, accounting firms can use Pennylane collaboratively. Clients can also access the platform to centralize receipts, create invoices and automate some tasks. Instead of sending information back and forth with spreadsheets and photo attachments, both clients and accounting firms can interact directly on the platform.

Right now, there are 300 accounting firms that are using Pennylane. Some of them have started using the product with a few clients, others have completely switched to the new tool. Interestingly, Pennylane clients want to use the platform more and more, which means that they bring new clients to the platform.

“Nine months ago, 90% of our clients reached out to us directly and 10% of them became clients through accounting firms. Nine months later, that trend has changed. 81% of our clients come from accounting firms,” co-founder and CEO Arthur Waller told me.

While the startup didn’t want to share revenue numbers, Waller told me that the startup has been growing by 20% month over month since this summer. Since 2020, Pennylane has raised $96 million.

If you take a step back, Pennylane has a significant market opportunity ahead. In the U.K., the U.S. and other more mature markets, companies have been using QuickBooks, Xero and other software-as-a-service solutions. But accounting is a fragmented industry with each country using their own software solution. In some countries, such as France, there’s no definitive SaaS solution for accounting.

“In France, there are roughly 12,000 accounting firms. Today we work with 300,” Waller said. “Our goal is that in 4 or 5 years we work with 1.5 million small and medium companies,” he added.

There are some geographic expansion opportunities ahead, but also some product opportunities. Pennylane could become the central hub for everything related to financial management.

For instance, the company has started beta-testing corporate cards with Swan to facilitate payments. You could imagine a sort of revenue-sharing deal with accounting firms for the interchange fees generated by those corporate cards. With today’s fundraising, the company thinks it can iterate on its product as there are still a lot of things to do just for the French market.

The company plans to reach 500 employees by the end of the year. As Pennylane thinks tech and product remain the most important areas for the startup, most hires will be in these categories. Essentially, Pennylanes wants to create a product that is a no-brainer for new accountants getting started.