Finance teams are the backbones of pretty much every company. Without proper money management and accounting, businesses are almost guaranteed to run into obstacles. But for some reason, technology hasn’t disrupted business finance in the same way as it has disrupted sales, marketing or software development.
For example, many businesses still send out invoices by printing them and mailing them or emailing them as a PDF attachment. Then the company that received the invoice has to figure out the correct channel to file it, enter it into their system by hand and figure out how to pay it. This whole process can take a month or more.
Seattle-based Lockstep was founded in order to streamline the B2B accounting process. Lockstep has created a cloud-based accounting platform that connects accounts receivable (AR) and accounts payable (AP) departments in order to optimize invoicing and replace the manual process that so many companies reluctantly rely on.
This concept has earned the company some attention from investors. On Wednesday, Lockstep announced the closing of its $10 million Series A funding round, which was led by Point72 Ventures. This is a solid achievement for the company that is just shy of two years old.
Lockstep was founded by a team of executives who bring years of experience working at tech companies like Avalara, Globys, Haitek Solutions, Microsoft and more. During their careers, many of them experienced the headache of manual invoicing firsthand. Yet they were unable to find a better alternative, which led them to creating their own.
“My key piece of advice is that there can be a lot of value in solving a problem that others find incredibly boring — whether thats how to file expense reports, do sales taxes or get invoices processed,” Lockstep CEO and co-founder Peter Horadan told Built In. “But these can be big problems for companies that affect every area of their business. And when you solve that problem for a company, the company can get a lot of value from it.”
“For example, the average accounts receivable and accounts payable person receives 100 emails a day, and spends 50 to 75 percent of their time answering emails, and inputting information manually,” Horadan continued. “So one thing our customers are excited about is our web interface, which sits on top of an accounting system and lets trading partners do self-service to retrieve invoices, pay their bills, see their balance, and so on. And so our customers are very excited about that, because it starts to take the work out of email and takes it online.”
Lockstep grew over the course of 2020 as other companies had to shift aspects of their business online. The startup now has over 180 customers who collectively process over 800,000 invoices per month. And by streamlining the accounts receivable and accounts payable, Lockstep says it is able to free up money stuck in cash traps and improve customers’ cash flow by 30 percent or more.
To capitalize on this recent success, Lockstep plans to use some of this new funding to grow its team. The company wants to triple the size of its development team and make key hires across sales and marketing. Overall, Lockstep plans to grow its employee headcount from around 30 people now to 70 by the end of the year.
This growth will help Lockstep earn its place as another one of Seattle’s influential fintech companies.
“This is just an example of Seattle’s heritage of creating great accounting software, and the really supportive ecosystem here in Seattle,” Horadan told Built In. “Building accounting software requires a certain mindset and Seattle has been a great ecosystem for thinking about accounting. We’ve had a great success in building teams and finding supportive investors. Having access to what Seattle has to offer has been very helpful.”