Teal, a startup in the accounting infrastructure for vertical SaaS businesses sector, has revealed an $8 million Seed round today.
Founded in 2023 by Ian Crosby, former head of financial services at Shopify and CEO and co-founder of Bench Accounting, Teal allows vertical SaaS businesses to build accounting suites to offer to their SMB customers. The round was led by Torch Capital, with participation from Basis Set Ventures, General Advance, Dash Fund, and angel investors, including executives at Service Titan, Plaid, Brex, Unit, and Gusto.
Teal equips companies with the APIs and tools to build their accounting offerings for small business customers. This allows end-customer SMBs to determine real-time cash flow and per-product profitability, file taxes, and get support from live bookkeepers.
“Teal is building the Stripe for accounting. Just like Stripe provides the underlying infrastructure for Vertical SaaS companies to build payments products, Teal provides the infrastructure for Vertical SaaS companies to build and offer accounting features within their platforms,” said Crosby. Having led Bench Accounting, the largest bookkeeping service for SMBs, for a decade, I saw firsthand the limitations of standalone accounting software that is not integrated into the rest of a business’s core platform. We built Teal to address this problem.”
According to Teal, the need for embedded finance for vertical SaaS is growing exponentially, but accounting is the number one demanded feature that has not yet been incorporated. The absence of an accounting solution is the top reason for the lack of adoption of financial services features. By offering software directly within their platforms, the company’s customers create a financial hub that enhances engagement with the rest of their financial services products, such as payments, invoices, and banking.
“We’re thrilled to be supporting Teal in its mission to revolutionize the accounting space for SMBs. There are 30M+ SMBs in the US, and at Torch, we invest behind the tools and platforms that help their businesses thrive. There’s a huge, dire need for streamlined and intuitive accounting tools, and Teal’s embedded approach, coupled with Ian and team’s proven track record of building standout financial software will address these long-standing pain points. Their rapid growth and early success are a testament to this,” said Katie Reiner, partner at Torch Capital.
