AI is an imperfect technology, but one task it excels at is identifying patterns in massive amounts of data. That may be why a number of startups have sprung up in recent years offering AI-powered products aimed at automating accounting tasks, such as redacting sensitive information in paperwork and submitting forms across departments. Simply put, it’s low hanging fruit.
That’s not to say that accounting-focused AI isn’t profitable—quite the contrary. If anything of a case in point, Vic.aiwhich bills itself as an accounting automation platform, today announced it has raised $52 million in a Series A funding round led by GGV Capital and ICONIQ Growth with participation from Cowboy Ventures and Costanoa Ventures.
The new money brings Vic.ai’s total amount raised to $115 million, which CEO Alexander Hagerup says will be used for customer acquisition in North America and adding purchase order matching, payment fulfillment and “spending intelligence” capabilities to the Vic.ai platform.
“In this next phase of growth, Vic.ai will respond to the pressing market need to automate other financial elements by extending its AI solution to manage and analyze all of these tasks,” Hagerup told businessroundups.org in an e-mail. mail interview. “’AI’ has been a popular concept for years, but large enterprises are now getting to the point where they are ready to adopt at scale, and they are doing so with a focus on specific functions such as accounting and finance.”
Vic.ai was founded in 2017 by Hagerup and Kristoffer Roil, both Norwegian entrepreneurs. Prior to co-launching Vic.ai, Hagerup founded the Online Backup Company, a European backup and disaster recovery service provider. Roil spearheaded the creation of Telipol, a wireless provider in Norway that was later acquired by Hudya Group, a Scandinavian fintech company.
Hagerup and Roil say they built the first iteration of Vic.ai by training the platform on historical accounting data and processes from tens of thousands of public companies. The training dataset included accounting documents and associated journal entries that were reviewed by auditors from consulting firms, including PricewaterhouseCoopers. This “live use” helped train Vic.ai’s machine learning algorithms over time, according to Hagerup, allowing it to provide near “complete autonomy” for transaction processing.
Vic.ai primarily takes care of invoice processing, using the aforementioned algorithms to select invoices and expenses that meet a certain confidence threshold and automatically send them to approvers. The platform also determines the number of steps in an invoice approval process and automatically determines which employee should review each step.
Hagerup says Vic.ai uses the invoices it processes for customers to improve the performance of its algorithms. Data on the platform is kept for seven years, but Vic.ai maintains “strict separation” of US and EU data to comply with GDPR and is committed to removing personally identifiable information, he says.
Unlike some AI vendors, Vic.ai is fortunate to occupy an industry that is beginning to embrace automation. A 2021 survey of about 200 companies and financial institutions found that while management priorities and IT availability remain the top roadblocks to automated workflows, just over a third of respondents said they plan to spend “more or significantly more” on to automation technology for accounts receivable within the next two years.
Vic.ai’s customer base reflects this. According to Hagerup, the company now has 60 enterprise customers, including HSB, Intercom and Armanino, with an active user base that has grown by 280% compared to 2021. Vic.ai’s contracted annual recurring revenue has tripled in 2022 compared to 2021 ( $5 million), he added.
“As a true AI company, Vic.ai turns accounts payable automation into true autonomy. While some of our competitors offer solutions based on rules and templates, our unique approach sets us apart from the status quo,” said Hagerup. “Moving manual routines on site via email or spreadsheet to a cloud-based solution with audit trails and compliance features is beneficial for C-level IT managers…We are well positioned for an economic downturn.”
Vic.ai competes with vendors such as Upflow, Glean AI and Quadient-owned YayPay in accounts receivable management and automation. (For context, the accounts payable automation market alone is estimated to grow from $1.9 billion in 2019 to $3.1 billion in 2024, according to MarketsandMarkets.) Tipalti is perhaps the most formidable, with $270 million raised against a valuation of $8.3 billion last December.
To beat its rivals, New York-based Vic.ai has expanded rapidly — tripling its workforce this year to 106 employees — and invested in building out its AI-powered purchase order matching technology, which it sees as a important differentiating factor.
