Accounting start-up Pilot raised a new round of funding from Jeff Bezos and other Silicon Valley investors to help small businesses outsource back-office tasks.
The San Francisco-based company closed a $100 million funding round this week, doubling its valuation to $1.2 billion. The round was led by Bezos‘s venture capital firm Bezos Expeditions and hedge fund Whale Rock Capital, with participation from Sequoia and Index Ventures. Stripe and its founders, Patrick and John Collison, as well as former VMware CEO Diane Greene had previously invested in Pilot.
Its co-founder and CEO Waseem Daher interned at Amazon sixteen years ago before starting two other companies. One was bought by Oracle, the other by Dropbox. He likened Pilot’s use case to a problem solved by Amazon Web Services: let developers focus on building a business instead of figuring out how to host a website.
“There’s all of this annoying, tedious, scary and important back-office stuff that you need to do as a small business owner,” Daher told CNBC in an interview. “Owners should focus on running a company at scale, and Pilot should be doing the back office stuff for you.”
Pilot’s employees — mostly former accountants — are assigned to work directly with a small business. They take on administrative tasks like payroll, book-keeping, taxes and bills. The start-up has partnered with companies including American Express, Bill.com, Gusto and Stripe. Daher describes it as “tech-enabled,” but Pilot itself is not a software company. The company makes money from subscription fees.
Pilot’s revenue roughly doubled up during the pandemic despite small businesses bearing the brunt of Covid-related shutdowns. The company’s revenue has roughly tripled every year since it was founded in 2017, Daher said.
He attributed recent growth to awareness of automation as people run their companies from home. More millennials are also starting small businesses, and tend to be more open to outsourcing through a tech platform, Daher said.
“People want to do this virtually. They don’t want to have to go down to Main Street with their box of receipts and visit their accountant’s office,” he said.
Pilot is Daher’s third company with co-founders Jeff Arnold, Pilot’s COO, and Jessica McKellar, the company’s CTO. The group met as undergraduates at MIT in the computer club.
Index Ventures partner Mark Goldberg, an early investor in Pilot, first met the group of founders at Dropbox nearly a decade ago. While the narrative in Silicon Valley right is “focused on using software to optimize for everything,” Goldberg said Pilot is taking the “opposite approach” by adding people back in the mix.
“Nobody starts a company to deal with BS in the back office. You want someone to extract that pain point,” Goldberg said. “People don’t want software, they want peace of mind.”