Teal raised $8 million in seed funding to build its accounting infrastructure for vertical software-as-a-service (SaaS) businesses.
The company’s APIs and tools allow these businesses to build their own accounting suites to offer to their small- to medium-sized business (SMB) customers, Teal said in a Monday (May 20) press release.
“Having led Bench Accounting, the largest bookkeeping service for SMBs, for a decade, I saw firsthand the limitations of standalone accounting software that is not integrated into the rest of a business’s core platform,” Teal Co-founder and CEO Ian Crosby said in the release.
Crosby founded Teal in 2023 after serving as CEO and co-founder of Bench Accounting and as head of financial services at Shopify, according to the release.
Teal aims to provide an accounting solution that vertical SaaS businesses can offer directly within their platforms to create a financial hub that enhances engagement with their other financial services products like payments, invoices and banking, the release said.
The company’s suite of tools enables these businesses to launch their accounting platforms in as little as four weeks, per the release.
Katie Reiner, partner at Torch Capital, the company that led the seed round, said in the release that Teal’s accounting solutions will appeal to the more than 30 million SMBs in the United States.
“There’s a huge, dire need for streamlined and intuitive accounting tools, and Teal’s embedded approach, coupled with Ian and team’s proven track record of building standout financial software, will address these long-standing pain points,” Reiner said in the release.
Software platforms and marketplaces are well-suited to integrate financial services and products into their regular user experience due to their close relationships with their customers, Luke Latham, general manager of Australia and New Zealand at Airwallex, told PYMNTS in an interview posted in December.
“Any financial product or service that has traditionally involved a departure from the user experience, or an additional set of activities, is there for the taking,” Latham said.
Tom Randklev, global head of product at Cellpoint Digital, told PYMNTS during the same discussion that many platforms and marketplaces have found success in the SMB market by using embedded finance to meet customers’ needs.
“It’s an opportunity to improve customer acquisition, reduce customer acquisition costs and improve retention,” Randklev said.
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