The United States is facing a shortage of accountants. Fewer first-time candidates taking the CPA exam according to the American Institute of Certified Public Accountants in 2022 than in 2006. One possible reason why people are not as interested in this field is the great amount of tedious work: accountants must sift through large amounts of unstructured data to perform an audit or even simply find answers to your questions.
Kevin Merlini, co-founder and CEO of the company Matterhe left the field for this very reason and is now working to reduce this burden for other accountants.
Materia integrates with existing company workflow software and applications, reminiscent of Microsoft Excel and Teams, to help break down the silos that exist in accounting firms’ unstructured data sets. This allows it to automate and improve the mundane and tedious parts of an accounting audit, allowing accountants to focus more on high-risk areas that require special attention. It also allows accountants to easily search company data and documents for answers. The company uses generative artificial intelligence platforms reminiscent of OpenAI to process information from company documents.
“Professional accounting services are interesting because they’re almost undervalued and undervalued, so there’s quite a fascinating story to tell there,” Merlini told TechCrunch. “There is also a lot of pressure on corporations to improve efficiency. There are many PE acquisitions. There are many aspects encouraging corporations to invest in their efficiency and quality.
The company is emerging from obscurity with $6.3 million in funding. The round was led by Spark Capital with participation of, among others, Haystack Ventures, Thomson Reuters Ventures, Exponent Capital and Allen Institute for AI. So far, the company has five clients ranging from the top 100 accounting firms in the U.S. to the top 15, Merlini said, and some of them have implemented Materia across their entire audit group.
However, Merlini’s journey to launch Matter was not a easy one. Although he specialized and obtained a master’s degree in accounting, he only lasted about 4 months as an auditor at KPMG.
“If you study accounting, it’s quite interesting,” Merlini said. “You’re wondering how to take all these complex events that happen throughout the year and boil them down to numbers that can be compared across companies. But when it comes to being an auditor and working in the big four [accounting firm]there is a lot more drudgery.”
Even though he was aware of the industry’s problems at the time, he worked in the technology industry for eight years before founding Materia. Merlini was a product manager at Amazon for over six years and most recently worked at Meta, working on its large language models and how those models classify journalism.
Merlini, nonetheless, all the time wanted to be a founder and the painful experiences he felt in his short accounting profession stayed with him. He left Meta in 2022 to determine what he wanted to build. He landed on Materia because he realized that with the advances he was seeing in artificial intelligence, he could actually solve the problems that existed in accounting.
“It was clear to me that big language models represented a huge paradigm shift in terms of what was possible,” Merlini said. “I had a decent number of friends from college who work in accounting services, I had an existing network there and I started exploring. What are these key problems and where are current solutions inadequate?”
Merlini and co-founder Lucas Adams incubated the company at the Allen Institute for AI in the summer of 2022. When ChatGPT began rolling out later that yr, they were able to make the most of the AI boom.
Merlini said the company takes safety and accuracy very seriously. Agreements with OpenAI and other artificial intelligence corporations limit LLM’s ability to learn from questions from Materia customers. Matter also states where it gets all its information from. So whether information appears in an audit or as an answer to an accountant’s query, someone can all the time double-check that it is correct.
The startup has so far offered white glove services to a select group of corporations because Materia operated in secret. Merlini said that now that it’s out of the closet, the company is targeting the 200 largest accounting firms in the U.S. to start with plans to move forward in the future.
“What an exciting opportunity this is, not for us as a company, but for professionals,” Merlini said. “One of the reasons is the shortage of people [in accounting] whether there is a lot of abrasion. Until recently, such automation was not practical or possible. We’re just excited to get started.”