Lockstep, a Seattle startup using software and the cloud to improve accounting practices, has raised $10 million in a Series A funding round, the company announced Wednesday.
Founded in 2019, Lockstep’s “connected accounting” relies on tools such as email automation and accounting-specific inboxes for accounts receivable and accounts payable teams, helping to eliminate the cash traps and cash leaks that occur through the human handling of company books.
“We founded Lockstep on the belief that accounting deserves better tools to keep their books in sync with customers and vendors for reliable and predictable cash flow,” Lockstep co-founder and CEO Peter Horadan said in a news release.
Lockstep’s email automation sends out reminders of an invoice coming due or remittance information when a bill is paid, saving a massive amount of time and keeping cash flowing. The company also provides online account management and access to allow vendors and customers to see the current statement, manage their accounts, and make payments online.
Rather than using siloed personal inboxes and spreadsheets, a shared accounting inbox allows the team to work in one place with search, assignments, tracking and reporting to ensure nothing falls through the cracks, increasing productivity.
“Businesses in every industry have been planning for digital transformation. However over the last year, what was once a five- to 10-year plan became a ‘right now’ plan as everything shifted to remote,” Horadan told Mekhato. “The bottlenecks that were previously tolerated, such as paper invoices, paper checks, and personal inboxes, were suddenly unacceptable, creating cash traps for businesses when they needed cash flow more than ever.”
Horadan, who was previously previously EVP of engineering and CTO at tax automation startup Avalara, said that during the COVID-19 pandemic Lockstep’s ability to enable remote accounting teams, create automated communications, and facilitate online payments have been big drivers for the business. Annual recurring revenue grew over 100% in 2020.
Calling “broken accounting” a problem for every business, Horadan said Lockstep has customers in a wide range of industries including manufacturing, distributors, business services, information services, and tech companies. It has 180 customers in 29 industries across seven countries.
The new funding will be used to expand product development and accelerate go-to-market initiatives and the round was led by Point72 Ventures with participation from Clocktower Ventures and Revel Partners.
Lockstep previously closed a seed round in May 2019, led by SeaChange with participation from Avalara CEO Scott McFarlane, Avalara co-founder Jared Vogt, Amazon Worldwide Consumer CEO Jeff Wilke, Pioneer Square Labs Managing Director Geoff Entress, and angel investors Ben Slivka, Lisa Slivka, and Charles Fitzgerald.
Lockstep currently employs 33 people remotely in the U.S. and India.