Right place, right time: Accounting startup Karbon has raised $7 million to capitalise on a gap in the Australian market
Friday, June 22, 2018/
Off the back of a $7 million capital raise, accounting startup Karbon says it’s poised to capitalise on the collapse of MYOB’s planned acquisition of Reckon’s accounting business, but founder Stuart McLeod says its simply a case of right-place-right-time.
The startup, run by its Australian founder but based in San Francisco, aims to disrupt the accounting space with its cloud-based Software-as-a-Service product in a space that is largely dominated by desktop solutions.
This latest funding round was led by Australian venture capital firm Blackbird Ventures, and also included notes converted from previous funding rounds, and investment from Karbon executives.
But, McLeod tells StartupSmart, the funds will be directed towards investing in the product, and capitalising on the collapse of talks about MYOB acquiring Reckon’s accounting business, APS.
“There are a lot of Reckon customers that will go into a serious purchasing decision, and are likely to choose another solution,” McLeod predicts.
“Sometimes, everything in life is about timing. The market landscape is shifting reasonably quickly in Australia, and we’re well positioned to take advantage.”
Karbon already has staff on the ground in Sydney and Melbourne to manage the influx McLeod is anticipating.
“We don’t have to change our roadmap or our positioning or our market or anything,” he says.
“We’re just well-positioned to accept the customers that have been on other desktop solutions.”
The American dream
Although the company is run by an Australian and has Australian backers, McLeod says he’s not likely to head home yet.
He has strong ties in Australia, and so having Blackbird Ventures on board as an investor is something that “just worked out like that”, he says, adding: “So far, that’s certainly turned out to be a great decision”.
But, California is the home of Karbon — and not for the accounting market, for the quality of life.
“It’s about the environment and everything,” he says.
“We have family, we have a great lifestyle, and it’s nice getting Amazon one-day delivery. All of those things.”
He adds: “While I’m here, the [Karbon] headquarters is here.”
However, wherever you are in the world, McLeod says founding a startup is hard.
“There are many, many challenges and every startup is hard,” he says.
“I have great empathy for every founder who goes on the journey.”
For founders, McLeod’s advice is simply to never give up.
“Our greatest strength as a company is perseverance and persistence. We never give up ad that’s held us in really good stead,” he says.
“Now, we’re bearing the fruit of all our hard work.”