AI is an imperfect technology, but one task it excels at is identifying patterns in large amounts of data. Perhaps that’s why a number of startups have sprung up in recent years, offering AI-powered products aimed at automating accounting tasks, like redacting sensitive information in documents and Filing of forms in different departments. Simply put, these are handy fruits.
This does not mean that accounting-focused AI is not profitable, on the contrary. As something of a case in point, Vic.aiwhich bills itself as an accounting automation platform, today announced it has raised $52 million in a Series C funding round led by GGV Capital and ICONIQ Growth with participation from Cowboy Ventures and Costanoa Ventures .
The new cash brings Vic.ai’s total raised to $115 million, which CEO Alexander Hagerup says is dedicated to acquiring customers in North America and adding purchase order matching capabilities , payment execution and “smart spending” to the Vic.ai platform.
“In this next stage of growth, Vic.ai will capitalize on the urgent market need to automate other elements of finance by expanding its AI solution to manage and analyze all of these tasks,” Hagerup told TechCrunch in an email interview. ““AI” has been a hot concept for many years, but large companies are just getting to the point where they are ready to adopt it on a large scale, and they are doing so by focusing on specific functions such as accounting and finance.
Vic.ai was founded in 2017 by Hagerup and Kristoffer Roil, both Norwegian entrepreneurs. Prior to co-launching Vic.ai, Hagerup founded Online Backup Company, a European backup and disaster recovery service provider. Roil spearheaded the creation of Telipol, a mobile operator in Norway which was later acquired by Hudya Group, a Nordic fintech company.
Hagerup and Roil say they built the first iteration of Vic.ai by training the platform on historical accounting data and processes from tens of thousands of public companies. The training dataset contained accounting documents and corresponding journal entries that were reviewed by accountants from consulting firms, including PricewaterhouseCoopers. This “live use” has helped train Vic.ai’s machine learning algorithms over time, according to Hagerup, allowing it to provide “almost complete autonomy” for transaction processing.
Vic.ai primarily handles invoice processing, leveraging the aforementioned algorithms to select invoices and expenses that meet a certain confidence threshold and automatically send them to approvers. The platform also determines the number of steps in an invoice approval process and automatically decides which employee should review each step.
Hagerup says Vic.ai uses the invoices it processes for customers to improve the performance of its algorithms. Data on the platform is retained for seven years, but Vic.ai maintains “strict separation” of US and EU data to comply with GDPR and strives to remove personally identifiable information, it says.
Unlike some AI vendors, Vic.ai is fortunate to occupy an industry that is beginning to embrace automation. A 2021 survey of around 200 businesses and financial institutions found that while management priorities and IT availability remain the top barriers to automated workflows, just over a third of respondents said that they planned to spend “more or a lot more” on accounts payable automation technology. in the next two years.
Vic.ai’s customer base reflects this. According to Hagerup, the company now has 60 enterprise customers, including HSB, Intercom and Armanino, with an active user base that grew 280% from 2021. Vic.ai’s contract annual recurring revenue tripled in 2022 from compared to 2021 ($5 million), he added.
“As a true AI company, Vic.ai transforms accounts payable automation into true self-sufficiency. While some of our competitors offer rules-based and pattern-based solutions, our unique approach sets us apart from the status quo “Moving operations from manual on-premises routines via email or spreadsheet to a cloud-based solution with audit trails and compliance features is good for C-level IT managers,” Hagerup said. … We are well positioned for an economic downturn.”
Vic.ai competes with providers such as Upflow, Glean the AI and owned by Quadient Yay Pay in the customer account management and automation space. (For context, the accounts payable automation market alone is expected to grow from $1.9 billion in 2019 to $3.1 billion by 2024, according to MarketsandMarkets.) Tipalti may be the more formidable, having raised $270 million at a valuation of $8.3 billion last December.
To fend off rivals, New York-based Vic.ai has grown rapidly — it tripled its workforce to 106 employees this year — and invested in developing its email-based purchase order matching technology. ‘AI, which he sees as a key differentiator.