It’s not the sexiest topic, but someone needs to talk about it: the CFO technology stack – the software used by CFOs around the world – is ripe for disruption. This according to Jonathan SandersCEO and co-founder of a fledgling Danish startup Lightwhich exits Wednesday with $13 million in a seed round of funding led by European VC giant Atomico.
A Copenhagen-based startup is completely redesigning general ledger software with artificial intelligence to clean transaction data while enabling finance teams to ask questions in plain English and receive easy answers from their data.
Light is based on automatic accounting books
Having worked at firms akin to investment bank Credit Suisse and Pleo, an SMB spend management company, Sanders has a reasonable insight into the work environment in the CFO’s office. Enterprise Resource Planning (ERP) software is king, it includes support for CRM (customer relationship management), HR (human resources), project management and perhaps the most significant element of all, the general ledger.
The general ledger is a comprehensive record of a company’s financial transactions, recording every dollar, dime and penny that comes in and goes out. This is essential for the CFO because it is the only source of truth about the company’s financial condition. And it is on this element that ERP Light focuses on moving into the modern digital era, where artificial intelligence increasingly rules.
“Our mission is to be the first automated ledger for global businesses,” Sanders told TechCrunch. “We believe CFOs and finance teams deserve the full benefits of AI by gaining the full accounting and tax knowledge and experience of large organizations that has been denied to them until now.”
Companies are integrating Light with their CRM and HRM tools, their banks, and even communication channels like Microsoft Teams and Slack. The “artificial intelligence” on the platform is a mix of models, each of which serves a different purpose for the financial community. This may include handling manual tasks akin to line item coding (i.e. assigning codes to individual transactions), developing correct tax codes, and related accounting tasks.
“We use one model to help keep all items on the books with correct taxes and accounts, and another model to help management ask questions about revenue, costs and profits — directly from Slack,” Sanders said. “We have a mix of off-the-shelf models and refined open source models, and we continue to experiment with them as the AI landscape changes rapidly.”
By spinning off ERP, Light is giving something of a middle finger to legacy applications like Oracle NetSuite, SAP ERP and Microsoft Dynamics, while taking on the challenge of “younger” startups like Quickbooks and Xero. The company is targeting “multi-entity multi-entity companies” and guarantees a unified dashboard for all their global transactions that can be “fully searchable and queryable using artificial intelligence.”
This all stems from Sanders’ personal frustrations with working with established ERP systems.
“I remember one time I was working with the finance team on some ERP report and the page took over 20 seconds to load. “I asked why the Wi-Fi was so slow,” Sanders said. “They said it wasn’t the Wi-Fi that was the problem, it was the product. I knew immediately that something had to be done.”
What’s more, Sanders also touts a cleaner, “Apple-style” interface that finance teams won’t hate.
In short, as an alternative of offering solutions akin to CRM, HR or project management, Light only supports functions akin to receivables (AR), payables (AP), accounting, VAT reporting and others.
But why hassle with the chapter at all?
While having a full-featured ERP system makes sense for some firms, for example where sales, supply chain and workforce data need to be closely linked (e.g. in manufacturing), this is not the case for many (or even most ) firms today – firms that already use standalone tools that have traditionally existed on the ERP platform.
“We chose to focus on general ledger to build a transparent and focused product — the most difficult and important problem for today’s finance teams to solve,” Sanders said. “Modern companies use the best CRM like Salesforce; and the best HR software such as Workday or Factorial. However, there is no global ledger separate from the ERP suite, so you are forced to implement an end-to-end ERP system with built-in CRM and HRM products you never use.”
Sold on a subscription basis with volume-based pricing, Light also hopes to reach a recent breed of company drained of outdated software that is priced on a per-seat basis, ultimately limiting access to select people inside the company. So Light has quite a big selection of options when it comes to identifying its goal market – the only thing which may connect them is the desire to scale globally.
“The primary users on a day-to-day basis are finance teams, including the CFO,” Sanders said. “Whether a company has 50 or 5,000 employees, it can leverage Light across its global operations. We focused on providing a seamless interface with the rest of the company so that anyone with the appropriate permissions could easily approve invoices, submit expenses, and view information or reports from vendors.”
Easy job
After leaving his position as Pleo’s chief payments officer in 2020, Sanders founded one other fintech company called June, which develops tools to help e-commerce firms higher manage their funds. The startup subsequently raised over $280 million, but Sanders left in 2022. He maintains there was nothing particularly acrimonious about his departure.
“We wanted to take the company in different directions — I remain a happy shareholder, cheering on from the sidelines,” Sanders said.
So in 2023, Sanders launched Light, and although it has been operating in secret for the past 12 months, the platform is now technically lively and available worldwide. The lion’s share of the company’s current customers come from the Nordic countries, including Worksome, Smooth, Family AND Proxies — that is something Sanders believes keeps his own company thriving.
“In the Nordic countries, as well as in other smaller European countries, companies must be global from day one,” Sanders said. “This signifies that as soon as you discover business traction, you’ll have to open legal entities in other countries and your financial backbone will collapse. Our mission is to help these firms as they start their journey to go global and free them from the burdens of existing legacy solutions.
In addition to essential sponsor Atomico, Light’s seed round also included participation from Cherry Ventures, Entrée Capital, Seedcamp and angels akin to German footballer Mario Gotze.