Toronto startup Wave Accounting has landed a series B round of financing worth US$12 million, plus some impressive new backers that include a former Facebook vice-president.
The funding comes from OMERS Ventures (the venture capital arm of theOntario civil servants’ pension fund), Boston-based VC firm CharlesRiver Ventures, and Social+Capital Partnership, a VC house based inPalo Alto, Ca.
It brings the company’s total financing haul so far to $18.5 million.The firm, which provides free cloud-based accounting software for smallbusinesses and solo entrepreneurs, raised $1.5 million abouta year agofrom OMERS Ventures, then another $5 million during a series A roundlast fall through OMERS Ventures and Charles River, the latter of whichhas about $2 billion in assets under management.
The proceeds from the latest $12-million infusion will help Wave hiremore staff and deepen its traction in the U.S. market.
“We’re in a very aggressive growth phase in terms of staffing becausewe have huge plans for our two existing products as well as otherfuture projects. We’re looking at doubling (staffing) again by the endof the year,” said Rob Maurin, vice-president of community, content andcommunications at Wave.
Wave’s staff has already nearly doubled from 23 people at New Year’s to45 now. The bulk of the company’s employees are at its Torontoheadquarters, with three in Winnipeg and one in the U.S. The Americanmarket is a major target for Wave.
“It’s our primary market in terms of customers we have and we expectthat to continue,” Maurin said. “We do have a small footprint right nowin Rochester (N.Y.) where we’re heading up our payroll (product)efforts. We’re looking to boost our presence on the ground (in theU.S.) but core engineering work will probably stay here in Toronto.”
Super connected new backers
Even more exciting than scoring the $12 million itself are theexpertise and connections that come with the newest backers behind themoney, Maurin said. Social+Capital, a first-time investor in Wave, is
headed up by Chamath Palihapitiya, who launched the VC firm when heleft his position as v.p. of user growth, mobile and internationalexpansion at Facebook in June 2011.
“What’s super interesting and attractive to us is the brain trustinvolved,” Maurin said.
Palihapitiya joined Facebook in 2007 and wasresponsible for launchingFacebook Platform (which allows third-party developers to create andintegrate applications with Facebook) and Facebook’s online advertisingchannel.
Mamoon Hamid, who is a general partner at Social+Capital, will join Wave’s board. Like his colleague Palihapitiya, Hamid also brings an impressivetrack record to the Wave table, including stints as an advisor to Yelpand a board member at both Yammer and Box.
It’s a huge boost for Wave, which has been expanding its customer baserapidly.
“We’ve got nearly a quarter of a million businesses signed up so farsince our launch in November 2010. We’re adding about 1,000 new signupsa day. We’re in about 200 countries. All of these really speak to thefact that our products resonate with customers,” Maurin said.
The key to Wave’s success so far is its focus on companies with nine orless employees, he added.
“They have radically different needs from (a business) with 20employees. It allows us to really customize the tools properly. We’readdressing a largely unaddressed market.”