How Pennylane Plans To Become France's Accounting Superhero

The conventional wisdom over the past decade is that any truly ambitious French startup must think globally from Day 1. But the accounting complexities facing companies in France are such that Pennylane's founders believe their home market presents an opportunity to build a fintech giant.

Founded in 2020, Pennylane has experienced meteoric growth in just five years. The company has positioned itself as an "all-in-one" accounting platform that serves both accountants and the small to medium-sized businesses they support. Currently operating only in France, Pennylane has built an impressive customer base of approximately 4,500 accounting firms and more than 350,000 small and medium-sized enterprises (SMEs).

Earlier this month, the company announced a €75 million funding round co-led by Sequoia Capital, Alphabet's CapitalG, and Meritech, with participation from DST Global. This latest funding round doubled the company's valuation to €2 billion, up from €1 billion in early 2024 when it achieved unicorn status with a €40 million Series C round.

The latest funding comes as Pennylane anticipates another wave of growth driven by expansion into Germany, the upcoming mandatory electronic invoicing reform in France, and the rapidly evolving capabilities of generative AI. Arthur Waller, Pennylane's CEO and co-founder, is projecting the company will hit $100M ARR this year and break even by continuing to focus on primarily on France..

"It's a big market," he said. "We are convinced that just in France, there is probably an addressable market of a couple of billion euros. So you want to have the product right. And then the ambition is to go to continental Europe. But there is also no rush because we know it's a product game. We want to get France right before going too fast and extending and being defocused."

Finding a Gap in the Market

Pennylane was born from a simple observation: business owners needed better collaboration with their accountants. Waller said the starting point was talking to potential customers and small business owners who complained that collaboration with their accountants was far from smooth.

In the United States, QuickBooks has already solved this problem by bringing together the accountant and the business owner on the same platform. But in France, there was nothing comparable.

Instead, Waller said the traditional software solutions in France were designed primarily for accountants and were immensely complex, but inaccessible to business owners due to their complexity.

Recognizing this disconnect, Waller joined forces with 6 other co-founders: Alexandre Roquoplo, Edouard Mascré, Félix Blossier, Quentin de Metz, Tancrède Besnard, and Thierry Deo. This team set out to "build that platform that brings together the accountant and his or her customer, and also that gives that kind of single source of truth of financial and accounting data."

The European Opportunity

While American software companies have attempted to enter the European market, they've faced significant challenges. Bookkeeping and taxes are very tightly coupled. This created difficulties for companies like QuickBooks, which entered the French market but left after a few years. Waller said QuickBooks had a cool product, but it only did 20% of the things that accounts could do with legacy software by firms such as Cegid.

"We saw that there was a natural barrier to entry in France and continental Europe for those US players," Waller said. "And so we thought, okay, let's try to solve the same problem, but tailoring the product to the needs of European accountants."

Waller identified two key technological advantages Penny could leverage. The first was embedded finance. Where a company like QuickBooks would require accounts with a separate bank, Pennylane wanted to build banking directly into its platform.

"We try to build the whole experience within the product, so you don't need to be talking to someone else," he said.

The second technology was AI.

Overcoming Adoption Challenges

Breaking into the accounting software market wasn't easy. According to Waller, the main barrier wasn't resistance to cloud technology but the deeply entrenched legacy solutions.

"Those legacy software, yes, they are old, but they are extremely deep when it comes to features," he said. "And an accountant uses them eight hours a day. He knows every keyboard shortcut by heart. And the name of the game in accounting is productivity, right? The more customers each accountant can handle, the more profitable they are."

The challenge was reaching feature parity to convince accountants to give Pennylane a try. "It took us two years before that happened, and it took us three years before there was a first accounting firm actually migrating the entire portfolio of customers," Waller said. "And we are now five years old, so it's very recent."

Accountants As Gatekeepers

Rather than targeting individual businesses directly, Pennylane focused on accounting firms as its primary channel. Waller said that 90% of its customers come from accounting firms deploying the entire portfolio on the platform.

This approach shaped the business model. Pennylane charges a license to the accounting firm, which includes premium access for the customer. But if a customer wants to run its business on Pennylane, it can also invoice customers, pay bills, and manage the budget.

This creates a multi-tiered revenue stream. Waller noted that Pennylane has approximately 10% of French businesses on the platform through their accountants.

Market Size and Strategic Focus

While many French startups feel pressured to expand internationally quickly, Pennylane has maintained a deliberate focus on its home market. He noted that Intuit operates in 8 countries and has a market cap of $160bn, incumbent CEGID has €1 bn in annual revenue, and the UK's Sage, which has about €3 billion in revenue from just a handful of European countries.

Waller said with the ability to offer additional financial services, France remains a large market that Pennylane has only just begun tapping. And now it's potentially going to get even bigger.

The latest €75 million funding round comes at a pivotal moment, with France implementing mandatory electronic invoicing requirements. A big chunk of that money will go towards growing the R&D team to tackle two significant trends.

The first is the e-invoicing law that enters into force in September 2026. Every French company will need to choose an operator that has been approved by regulators to issue and receive invoices.

Pennylane, which has that seal of approval, offers an integrated platform that combines financial management, business accounts, accounting production, and a Partner Dematerialisation Platform (PDP).

The e-invoicing reform represents more than just a compliance hurdle—it's an opportunity to accelerate digital transformation. Waller said that there are two main motivations behind the reform by the French tax administration.

"One is making sure there's no VAT money that doesn't get paid," he said. "And two is making sure the French tax administration understands the shape of the businesses in the country. They realized with COVID that they had to disburse a lot of money based on pretty outdated information, like fiscal data from 18 months ago."

The mandatory nature of the reform will drive rapid adoption.

"It will be a massive and very accelerated digitization because people have no choice," Waller said. "If you don't issue your invoice through your operator first, you might pay a penalty, and it means that the one who receives your invoice will not be able to get the VAT back. So your customer will ask you to send that invoice through the platform."

AI And Accounting's Future

While some industries have been dramatically transformed by generative AI, Waller sees its role in accounting differently.

"Accounting data is very structured data already," he said. "It's not so much text. It's mainly figures. So, accounting software already has some automation. If you compare accounting lawyers where the main data is text, GenAI is less disruptive for accounts."

Rather than replacing accountants, Waller sees AI as augmenting them.

"GenAI for accountants is like Co-Pilot is for software engineers," he said. "They can ask any question, and the chatbot will take into account the context of the code you're writing to answer your question. The new role for accountants is to become more like advisors and less accountants. It's a new thing for them. We see this as building the Co-Pilot of the accountant. When they log in in the morning, we tell them, Hey, I think today maybe you should call this customer, talk to him about their cash position. They have a lot of unpaid invoices, and maybe you can offer them to help them with collection, or automated reminders, or whatever."

"It's going to be win, win, win," Waller said. "Win for the accountant, win for the customer, win for Pennylane."