AI is a flawed technology, but one of the tasks it excels at is identifying patterns in huge amounts of data. Perhaps that is why in recent years a number of startups have emerged offering AI-powered products aimed at automating accounting tasks such as correcting sensitive information in paperwork and filing forms between different departments. Simply put, it is a low hanging fruit.
This does not mean that accounting-driven AI is not profitable – quite the contrary. As an example, Vic.ai, which promotes itself as an accounting automation platform, announced today that it has raised $52 million in a Series C funding round led by GGV Capital and ICONIQ Growth, with participation from Cowboy Ventures and Costanoa Ventures.
The new cash brings Vic.ai’s total to $115 million, and CEO Alexander Hagerup says it’s geared towards customer acquisition in North America, adding purchase order matching, payment processing, and “spending intelligence” capabilities to the Vic.ai platform.
“In this next phase of growth, Vic.ai will expand its AI solution to manage and analyze all these tasks, taking advantage of the market’s urgent need to automate other financial aspects,” Hagerup told TechCrunch in an email interview. “’AI’ has been a hot concept for many years, but large organizations are now getting to a point where they are ready to adopt it at scale, and they do so by focusing on specific functions like accounting and finance.”
Vic.ai was founded in 2017 by Hagerup and Kristoffer Roil, both Norwegian entrepreneurs. Before co-launching Vic.ai, Hagerup founded Online Backup Company, a European backup and disaster recovery service provider. Roil pioneered the founding of Telipol, a Norwegian wireless carrier that was later acquired by Hudya Group, a Scandinavian fintech company.
Hagerup and Roil say they built the first iteration of Vic.ai by educating the platform on historical accounting data and processes from tens of thousands of publicly traded companies. The training dataset included accounting documents and related journal entries reviewed by accountants at consulting firms, including PricewaterhouseCoopers. According to Hagerup, this “live usage” helped Vic.ai train its machine learning algorithms over time, allowing it to provide near “full autonomy” for transaction processing.
Vic.ai primarily handles invoice processing, leveraging the aforementioned algorithms to select invoices and expenditures that meet a certain threshold of trust and automatically send them to approvers. The platform also determines the number of steps in an invoice approval process and automatically decides which employee should review each step.
Hagerup says that Vic.ai uses the invoices it processes for its customers to improve the performance of its algorithms. Data on the platform is retained for seven years, but Vic.ai maintains a “strict separation” of US and EU data to comply with GDPR and strives to discard personally identifiable information.
Unlike some AI vendors, Vic.ai has a good chance of being in an industry that is starting to embrace automation. A 2021 survey of nearly 200 companies and financial institutions found that while management priorities and IT availability remain the biggest barriers to automated workflows, just over a third of respondents plan to spend “more or significantly more” on accounts payable automation technology. within the next two years.
Vic.ai’s client base reflects this. According to Hagerup, the company currently has 60 enterprise customers, including HSB, Intercom and Armanino, and its active user base has increased by 280% compared to 2021. Vic.ai’s committed annual recurring revenue tripled ($5 million) in 2022 compared to 2021, it added.
“As a true AI company, Vic.ai is transforming accounts payable automation into true autonomy. While some of our competitors offer solutions based on rules and templates, our unique approach separates us from the status quo,” said Hagerup. Moving from routines to a cloud-based solution with audit trails and compliance features is advantageous for IT C-level managers… We are well positioned for an economic downturn.”
Vic.ai competes against providers such as Upflow, Glean AI and Quadient’s YayPay in accounts receivable management and automation. (For context, the accounts receivable automation market alone is predicted to grow from $1.9 billion in 2019 to $3.1 billion in 2024, according to MarketsandMarkets.) Tipalti last December, at a valuation of $8.3 billion, with $270 million. collecting dollars is perhaps the most challenging.
New York-based Vic.ai has expanded rapidly to beat its rivals – tripling its headcount to 106 this year – and investing in developing AI-powered purchase order matching technology, which it sees as a key differentiator.
