Company Description
4m sole traders & landlords will be required to complete 5 tax submissions a year instead of 1, because of HMRC’s Making Tax Digital for Income Tax Self Assessment (MTD ITSA). What’s more, they will be required to use a digital product like Coconut to do this. Since building a much-loved accounting app for self-employed people in 2018, we have turned our focus toward the accountants & bookkeepers that serve them. With MTD ITSA on the horizon, accountants are looking for solutions to digitise their sole trader & landlord clients. Since Jan, we've grown our Partner Practices 10X, with licence growth averaging 50% per month since Aug. A sticky product with recurring revenues & less than 1.5% churn means unit economics are profitable & improving (Rev: £784k, EBITDA: -£1,882k for 12m to Oct 22). Our partners report Coconut is up to 4x faster than using traditional cloud software to gather, categorise & prepare financial information for filing. As an early Open Banking pioneer, we connect to 30+ different banks & credit cards so we have features that uniquely address the accounting challenges for sole traders & landlords. We believe these legislative changes present a great market opportunity for Coconut. Having developed software that’s winning deals against Xero & Quickbooks, this round is to fund sales & drive licence/revenue growth , with a model that has a strong product market fit.
Key Deal Facts
MTD ITSA coming April 2024 meaning 5 tax returns per year, Grown from 10 to 100 Partner Practices this year, inc. 2x top 40 firms, Accountant channel licences growing at 50% per month (Aug-Oct), B2B SaaS business model with profitable unit economics
