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Vic.ai, a startup developing software to automate accounting and financial processes, today announced that it closed a $50 million series B financing round with participation from GGV Capital, Cowboy Ventures, and Costanoa Ventures. Pivoting away from its initial focus on accounting professionals, Vic says it’ll use the capital to expand its existing enterprise offering as well as build out its financial intelligence engine.
Experts believe that automation holds enormous potential in the accounting industry. According to an Ernst & Young survey of finance leaders, 53% believe that more than half of finance tasks currently handled by people could be performed by AI over the next three years. In a separate study conducted by cloud accounting software company Sage, 45% of certified public accountants (CPAs) said that they intend to automate tasks including data entry and number-crunching, while 40% said they plan to automate invoicing and accounts payable processes and workflows.
Vic, which was founded in 2017 by Norwegian entrepreneurs Alexander Hagerup and Kristoffer Roil, combines the two pillars of (1) invoice processing and (2) optimizing business decisions while applying reasoning to the data that’s processed. The platform delivers features like the AI-powered Autopilot, which selects invoices and expenses that meet a certain confidence threshold and automates them so that they’re immediately sent to approvers without requiring human review. Another feature, Autonomous Approval Flows, determines the number of steps in an invoice approval process and automatically decides which employee needs to review each step.
“No matter the industry, every company needs accounting, which is inheritably tedious and time-consuming. Accounting tasks have always been managed by using legacy systems that are based on various predefined rules and templates, like Excel,” CEO Hagerup told VentureBeat via email. “Kris and I wanted to infuse intelligence into accounting through an AI solution that can reason like humans and make accounting decisions so that employees can focus on more high-value activities … Today, Vic delivers fully autonomous AI systems that make finance and accounting teams more efficient, accurate, and intelligent.”
AI under the hood
Hagerup and Roil built the first iteration of Vic by training the platform’s AI on historical accounting data and processes from more than 30,000 companies. The training dataset contained over 200 million accounting documents and corresponding journal entries, amounting to 300 million records, which were reviewed by accountants at consultancy firms including PricewaterhouseCoopers, BDO, and KPMG. This “live usage” helped to train Vic’s machine learning algorithm over time, enabling it to provide nearly “complete autonomy” for transaction processing, according to Hagerup.
“There is less bias to mitigate in accounting data, as the results are audited following official standards, and the audited data is fed back to the algorithms. Since we make predictions across 4,500 entities in multiple regions with thousands of accountants reviewing, any client or accounting firm preference — i.e., bias — is eliminated mainly by the size of the data and the review by external auditors,” Hagerup said.
Craig Le Clair, principal analyst at Forrester, cautioned that a potential Achilles’ heel for AI in finance and accounting is the extensive variation in process across firms that prevents AI solutions from being developed in a packaged and repeatable way. In short, he says, AI for finance and accounting is “being oversold a bit today.”
“Use cases such as account reconciliation, monthly close, invoice processing, financial planning and analysis, and adjacent areas like audit and contract analytics rely on extensive numbers and data and are prime candidates for AI, but do not provide value today. Based on the maturity of used AI components and adoption characteristics, AI usage today is not widespread,” Le Clair told VentureBeat via email. “Glancing at Vic.ai, it seems they do some invoice extraction. Also, they seem to do ‘reconciliation,’ but [they’re] somewhat vague on the ‘insight’ piece — [it’s unclear] if they have a financial planning and analysis solution that competes with specialists in finance and accounting.”
Be this as it may, New York-based Vic has processed more than 535 million invoices to date for more than 4,000 corporate finance and accounting clients, among them HSB, Intercom, and Armanino. Annual recurring revenue reached $5 million, growing three times year-over-year. And Vic expects to nearly double the size of its full-time 35-person workforce to 67 by the end of the year.
“From a customer and market adoption perspective, the pandemic has only accelerated the usage of cloud-based platforms for managing accounting work, and we see demand for our solutions,” Hagerup said. “Vic AI algorithm can perform reasoning intelligently and adapt to new requirements, making the accounting process autonomous.”
With this series B, Vic has raised $63 million in venture capital.
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