Japan’s Freee raises $60M to grow its cloud accounting business

Japan-based accounting software company Freee, one of the country’s most-prominent startups, has raised a $60 million Series E funding round as it bids to expand its services into other areas of management for its customers. Freee was founded six years ago — we wrote about the startup when it raised a Series A in 2013 — […]

Japan-based accounting software company Freee, one of the country’s most-prominent startups, has raised a $60 million Series E funding round as it bids to expand its services into other areas of management for its customers.

Freee was founded six years ago — we wrote about the startup when it raised a Series A in 2013 — which makes it one of the ‘oldest’ startups in Japan, while this round is also a large one for the country, too. Japan’s startup ecosystem has a culture that encourages founders to take their companies’ public earlier than in most parts of the world, to mitigate some risk, but there are signs of alternative approaches that include this round and of course the recent IPO of Mercari, which went public this summer and raised over $1 billion.

“Japan is a country that respects precedent a lot,” Freee founder and CEO Daisuke Sasaki told TechCrunch in an interview. “Having present cases will change [the culture] a lot, we are staying private and investing in growth. The ecosystem isn’t changing [yet] but [startups, founders and VCs] now have more options.”

Free was one of the first Japanese startups to raise from overseas investors, a move that helped get Japanese VCs interested in enterprise and Saas, and this time around it has pulled in capital from a bunch of big names: Chat app company Line, Mitsubishi UFJ Financial Group (MUFG) — Japan’s largest bank — consumer credit firm Life Card and “several [unnamed] international institutional investors.”

DCM and Infinity Investments are among the startup’s earliest backers.

Today, Freee offers cloud-based accounting and HR software and it claims to have over one million business accounts. It has over 5,000 certified accountant advisors — who help it reach new customers and also use it for their own work — and the company said that over 3,500 apps and services, including mainly financial products, are integration with its software.

Going forward, Sasaki — who is a former Googler — said Freee will use this new capital to build out an API ecosystem to enable more integrations — some of its practical ones right now include Slack and Salesforce — while it is planning a major collaboration with Line to allow Line business customers to integrate their use of the app with Free, while it is exploring how it can collaborate around Line Pay.

Freee founder and CEO Daisuke Sasaki

Freee is also focused on expanding the scope of its services to branch out into products that help with more general management and operational tasks.

“We want to focus not only on back office but also to add value to customers to make their businesses better through dashboards, reporting and insight. Customers who use the [existing business] reports grow faster. Our vision is to give much better insight and business advice through AI [and] to do that we need more data, not just back office but front line too,” Sasaki said.

Finally, the startup is exploring ways it can enable banks and financial organizations to work more closely with its customer base. Already customers can share data within Freee to banks for assessment for loans and other credit products, and the company is exploring the potential to introduce a marketplace that would give its customers a place to scout out financial products at more preferential rates.

“Initially we focused on small business but now our biggest customers have a couple of hundred employees so we are going upmarket,” Sasaki told TechCrunch.

One area Freee won’t be moving into is overseas markets. Yet at least. Sasaki explained that the company wants to build out that vision of an expanded ecosystem of connected services and more in-depth business tools before branching out into new countries.

SmartHR, a younger rival to free which specializes in HR as the name suggests, raised $13.3 million earlier this year to push on into areas such as payroll and more. That could begin to pose a threat to Freee, particularly since SmartHR a developer platform to hose third-party applications and services.

PSA: Automatic cross-posting tweets to Facebook no longer works as of today

You can no longer automatically cross-post your tweets to Facebook . Twitter announced today that functionality is now coming to an end, and users will instead have to copy a tweet’s URL if they want to share a tweet to Facebook going forward. In a statement, the company attributed the change to a recent Facebook […]

You can no longer automatically cross-post your tweets to Facebook . Twitter announced today that functionality is now coming to an end, and users will instead have to copy a tweet’s URL if they want to share a tweet to Facebook going forward. In a statement, the company attributed the change to a recent Facebook update.

Specifically, the issue has to do with Facebook’s lockdown of its API platform – an overhaul that’s been underway following the Cambridge Analytica scandal, where as many as 87 million Facebook users had their data improperly harvested and shared.

Since then, Facebook has been plugging holes in its API platform to prevent future data misuse. One of those changes involves Facebook Login, announced back in April. The company said that apps that had been granted permission to publish posts to Facebook as the logged-in user would no longer have that permission. New apps wouldn’t be able use this feature the day the change was announced. And in the case of older apps, the permission would be revoked on August 1, 2018  – that’s today.

Facebook also said developers who were previously using the API could instead turn to Facebook’s Share dialogs for webiOS and Android. But Twitter’s statement didn’t mention there would be an alternative means of sharing built back into Twitter, beyond using its existing “Copy link to Tweet” feature. This is a manual way of sharing tweets, of course, and not a replacement for what is being lost.

The option to set up Facebook sharing hasn’t completely disappeared from Twitter’s app as of yet.

Facebook still appears within the “Apps” section via the web, with the button “Login to Facebook” seemingly waiting to be clicked. However, this option will no longer work as of today. Instead, it returns the error: “Facebook reported an error. The error has been reported to our engineering team. Please try again as it might be a temporary problem.”

It doesn’t seem like Twitter users looking for other workarounds will have much success either, given this situation. Other apps, like IFTTT, for example, are throwing errors as of today, too.

 

Body scanning app 3DLOOK raises $1 million to measure your corpus

3D body scanning systems have hit the big time after years of stops and starts. Hot on the heels of Original Stitch’s Bodygram, another 3D scanner, 3DLOOK, has entered into the fray with a $1 million investment to measure bodies around the world. The founders, Vadim Rogovskiy, Ivan Makeev, and Alex Arapovd, created 3DLOOK when […]

3D body scanning systems have hit the big time after years of stops and starts. Hot on the heels of Original Stitch’s Bodygram, another 3D scanner, 3DLOOK, has entered into the fray with a $1 million investment to measure bodies around the world.

The founders, Vadim Rogovskiy, Ivan Makeev, and Alex Arapovd, created 3DLOOK when they found that they could measure a human body using just a smartphone. The team found that other solutions couldn’t let them measure fits with any precision and depended on expensive hardware.

“After more than six years of building companies in the ad tech industry I wanted to build something new which was not a commodity,” said Rogovskiy. “I wanted to overcome growth obstacles and I learned that the apparel industry had mounting return problems in e-commerce. 3DLOOK’s co-founders spent over a year on pure R&D and testing new approaches and combinations of different technologies before creating SAIA (Scanning Artificial Intelligence for Apparel) in 2016.”

The team raised $400,000 to date and most recently raised a $1 million seed round to grow the company.

The team also collects “fit profiles” and is able to supply these profiles based on “geographic location, age, and gender groups.” This means that 3DLOOK can give you exact sizes based on your scanned measurements and tell you how clothes will fit on your body. They have 20,000 profiles already and are working with eight paying customers and five large enterprise systems. Lemonade Fashion and Koviem are both using the platform.

“3DLOOK is the first company that managed to build a technology that allows capturing human body measurements with just two casual photos, and plans to disrupt the market of online apparel sales, offering brands and small stores an API for desktop and SDK for mobile to gather clients measurements and build custom clothing proposals,” said Rogovskiy. “Additionally, the company collects the database of human body measurements so that brands could build better clothing for all types of body and solve fit and return problems. It will not only allow stores to sell more apparel, it will allow people get the quality apparel.”

3D scanners have gotten better and better over the years and it’s interesting to see companies being able to scan bodies just from a few photos. While these things can’t account for opinions of taste they can definitely make sure that your clothes fit before you order them.

Taking the pain out of accounting and payroll for small businesses, ScaleFactor raises $10 million

ScaleFactor, the Techstars alumnus that’s selling accounting and payroll management software as a service, has raised $10 million in a new round of funding as it looks to scale up its sales and marketing efforts. Founded by longtime accountant, Kurt Rathmann, the Austin-based company has created a software service that collects and analyzes data from […]

ScaleFactor, the Techstars alumnus that’s selling accounting and payroll management software as a service, has raised $10 million in a new round of funding as it looks to scale up its sales and marketing efforts.

Founded by longtime accountant, Kurt Rathmann, the Austin-based company has created a software service that collects and analyzes data from point of sale systems, bank accounts, credit cards and billing systems, to automate recordkeeping and payroll functions.

Rathmann, a former KPMG employee, started ScaleFactor after seeing the lack of innovation in the backoffice functions that are really the engine of any small business.

“Around the tech stack, accounting and financials were lacking the most,” Rathmann says. So he left his job at KPMG and started ScaleFactor Consulting out of his garage in Austin in 2014.

After a few years of basically going door-to-door (a throwback to Rathmann’s first company as an 18-year-old selling outdoor lighting in suburban Dallas) to find out what small businesses needed from an accounting software solution, ScaleFactor developed the API toolkit and management software that would become the services it’s pitching today.

After graduating from TechStars’ Austin accelerator, the company was able to nab $2.5 million in a seed financing round that included TechStars Ventures, NextCoast Ventures, and two Kansas City-based investment firms — Firebrand Ventures and Flyover Capital.

While the initial services business holds a lot of value and has managed to attract scores of small businesses, both Rathmann and his new investors led by Canaan Partners and including Citi Ventures and Broadhaven Capital see bigger opportunities down the road for ScaleFactor.

With the window that the company has into the operations of small businesses around the country, ScaleFactor can serve as an unimpeachable source of information for small business lenders.

With insight of (and control over) payroll management, billpay, cash approvals, cash accounting, and an ability to project forward cash flows (along with invoicing and tax management for part time employees), ScaleFactor will be able to offer lending services to smooth bumps in a company’s progress. 

“Bookkeeping and accounting is really the nucleus,” says Michael Gilroy, a principal with Canaan Partners. 

While Square has moved into lending services (and now is on the hunt for a banking license) through its window into a company’s revenues through point-of-sale devices, a company like ScaleFactor has a more holistic view of the health of a business, says Gilroy.

Equipped with that information ScaleFactor software can do things — like prompt business owners of the revenue targets they need to hit each month or suggest lending options to cover shortfalls — that better equip business owners to handle disruptions. 

“With our foundation established, a big part of our Series A is how do we power the business owner past bookkeeping & accounting? We see many opportunities to help further and our next steps will include things like lending, payments and many other activities that take a business owner/operators focus away from driving their business forward,” Rathmann wrote in an email.