A lot has changed since I started KashFlow.
Back then, things were different – phrases like “software-as-a-service/SaaS” and “cloud applications” didn’t exist, and accounting software was clunky, horrible and full of jargon. Now, SaaS is mainstream and a number of worthy competitors have sprung up with similar visions of simplifying how small business owners keep their books.
We’ve done well so far executing our mission of automating and simplifying the running of a small business. We stand out as a clear market leader in the UK and we’ve come this far without raising any significant external finance. But as cloud adoption accelerates, so does the size of the opportunity for us, and we began to think about what we needed to be able to take advantage of the opportunity more quickly in a competitive market.
It’s easy to think that the answer is “money”, but it’s not. Money is easy to come by when you’re growing as quickly as we are, more so in a rapidly growing market. But money is just an enabler; it takes time to successfully turn hard cash into real benefits. Instead, I tried to work out what we’d be trying to achieve with a cash injection….
Our recipe for growth…
Great people make a great business, so we’d want to bring in people that have extensive software industry experience and have deep knowledge of accountancy.
Whether its accounts and tax production or payroll software, owning additional products gives the opportunity to build much tighter integration than anything possible with a third-party product.
We have a unique product for accountants that, in addition to helping them manage their clients, also helps us to access more SMEs. Being able to access a large slice of the accountants in the UK would really accelerate our growth.
And once we have all of the above, we’ll also need all of the supporting structures around it – marketing expertise, business development, finance, admin and reporting.
So, I should go raise some cash and get on with building the above, right? Actually, no…because there’s a shortcut to be found.
We’ve had a lot of interest from larger companies in the industry that want to “have a closer relationship”. Most of the time, partnerships wouldn’t have made sense. Sometimes it’s just a straightforward culture clash or a case of the combined entity not being more than the sum of the parts.
However, I’ve kept an eye on IRIS over recent years. They appointed ex-Salesforce.com exec Phill Robinson as CEO, and have been rapidly developing their own SaaS products in the accountancy space. Phill and I have had numerous conversations about how a combined KashFlow and IRIS could work. At first, they were just that; conversations, with no intent on either side to actually make something happen any time soon.
But it started to become apparent to both of us that it actually makes a lot of sense – IRIS has everything I mentioned above and more. They’re the shortcut I’ve been seeking. And on IRIS’ side, it’s clear that they want to expand their investment and capabilities in cloud bookkeeping.
So, now you have the context, here’s the announcement.
This week, KashFlow has been acquired by IRIS Software Group. (Press release with all the juicy details here!)
We have access to all the resources I wanted. The game has changed. We can now get on with improving the lives of many, many more business owners. Exciting times!