Bezos-Backed Pilot Accounting Platform Passes Unicorn Milestone

It’s always a good idea to follow the money where Amazon founder Jeff Bezos is concerned. So we took heed when his venture firm Bezos Expeditions participated in a $100 million Series C round for San Francisco-based Pilot. This round brings Pilot’s total raised to date at just under $160 million. The company, founded in 2017, has reached a $1.2 billion valuation, thus anointing it with not-as-rare-as-it-used-to-be unicorn status. 

So what is Pilot? The company positions itself as offering the “best bookkeeping, tax, and CFO services for growing businesses.” There are lots of integration mentions on Pilot’s website with companies we’ve covered on these pages. Including, Gusto, Stripe, and others.  

While Pilot serves small businesses, this is not some $49 per month bookkeeping software. The entry-level bookkeeping offer is $599 per month, billed annually. That covers up to $29,999 in monthly expenses. Once that threshold is reached, the rate jumps to $649. There’s a nifty little slider that shows what your bookkeeping would cost based on your monthly expenses. Pilot’s “select” solution begins at $849 per month and scales up from there. We have often written about usage models as a key new element in SaaS pricing.

Pilot applies usage-based pricing by using the monthly expenses as the modifier. Its two other service areas — CFO services and tax — have entry prices at $900 per month and $1,950 per year respectively. As a business owner, with expenses less than $30,000 per month, you’d be looking at almost $20,000 per year. When viewed as a SaaS annual spend, that seems pretty high. But if you were to compare that to having an outside accounting firm, then it feels more reasonable. 

Left to right: Jessica McKellar (CTO & Founder), Waseem Daher (CEO & Founder), Jeff Arnold (COO & Founder)
Another Pandemic Acceleration

So how are they doing? According to the press release, Pilot has 1,000 customers on the platform. As with many of the SMB tech platforms we cover, the pandemic has been a key driver of customer adoption/acquisition. In 2019, the company processed about $1.2 billion in bookkeeping transactions. And that number rose to more than $3 billion in 2020.

If we assume the average customer is spending in the $12,000 to $15,000 per year range, that would put the company’s annual revenues somewhere between $12 million and $15 million. A $1.2 billion valuation suggests the company is achieving some very favorable net retention metrics. That probably means customers entering at the lowest spend level are quickly moving up the curve. 

New Dollars, New Directions?

The company plans to use the funding to expand its back-office product line. Could that mean they move into adjacent areas where they integrate with partners today – say payroll via Gusto? Time will tell. If you’re running the books of a company, it would seem like you’d know when a company might need some short-term capital. The company could certainly head in that direction.

Because so much of what is happening today is happening in the cloud, the SaaS companies that earn the trust of the small business customers can use that trust as their competitive advantage. However, building that trust takes time. And nurturing it is not an easy task. And as we’ve seen time and time again, trust can be destroyed in an instant.

But when you’re running the books of a company, the opportunities are considerable. At a billion-dollar valuation, Pilot is valued at just 1% of Intuit, the leader in small business accounting software. So there’s a long-distance between where Pilot is today and Intuit. But with Bezos already putting in some of his spare change, Pilot could be well on its way to big-time success. We’re eager to observe its future progress. 

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