SevDesk's story sounds a bit like the American dream: for years, venture capital financiers have not shown any interest in the company based in the Baden province of Offenburg, which has developed cloud-based accounting software for small businesses and the self-employed. And now the founders, Fabian Silberer and Marco Reinbold, are collecting 50 million euros in a financing round. The two 30-year-old business IT specialists have ambitious plans. “We want to become the market leader in Germany and Austria in the next five to ten years,” says Silberer, the managing director of SevDesk GmbH. The goal is then a million customers.
Silberer does not want to name the current number of customers in order not to put himself and his team under pressure and then to be measured against forecasts.
In 2019, 80,000 customers were counted.
"The potential in Germany and Austria consists of 6.4 million self-employed and small businesses." And in this group of potential customers, the opportunities are great.
Because only 6 percent of the approximately 5.8 million self-employed in Germany used cloud-based accounting software.
At SevDesk, this works via an app on the smartphone, into which receipts are scanned and then automatically forwarded.
Either as a receipt for the tax office or tax advisor or as an automatically generated invoice to the customer.
Growth in Baden
“Our customers can still buy programs in the app store. For example, the tradesman on the field of measurement or hourly recording. This creates an entire ecosystem with which the customer can not only do the bookkeeping, but also write offers or create invoices. ”There are currently 40 partners. Over the next three years, the software should be compatible with 400 partners. 165 people are currently employed in Offenburg. But in order to cope with the planned growth, 200 new jobs are to be created by the end of 2022.
The founders, who currently hold almost 40 percent of the shares in the capital, made a turnover of 10 million euros a year through software licenses. Sales in the mid double-digit million range are expected in 2021. The proceeds are to be doubled several times in the coming years. "In the long term, the product should be further developed into a complete financial software in order to optimize the cooperation between customers, tax advisors, banks and the tax office."
The US investor Arena Holdings has made most of the funds available for the current financing round, reports Silberer.
And all existing investors would have invested.
He sees the cooperation with the American investor as a gain: "Arena Holdings understands our business model because they have already invested in several start-ups for accounting." For example in the companies Freee in Japan or in Xero in Australia.
But he clearly rejects a merger with SevDesk: "We want to grow as an independent company."
Arena Holdings with experience
Arena Holdings was founded in 2016 by Feroz Dewan. Before that, he worked for Tiger Global Management for more than ten years. Dewan himself doesn't want to speak to the press. The investor got on board together with Carsten Thoma. Thoma is one of the few German tech founders who were able to sell their company for more than a billion dollars. SAP bought its start-up Hybris, which offered software for managing customer relationships in the cloud. Regarding his latest investment, he says: "Arena Holdings and I believe that there is a wonderful opportunity here to develop a market-defining cloud-based software for self-employed and small businesses in Germany."
Investors see SevDesk as software as a long-term operating system for medium-sized companies that serves the needs of sole proprietorships and small businesses. “We are assuming that over time 100 percent of small and medium-sized companies will work via the cloud, and we expect that a large number of them will manage their business on SevDesk.” The two Baden founders targeted this Main investors selected because they have experience with the stock market. Silberer says: “In the long term, our business model fits the stock market. I can certainly imagine that in five years. "