Fondo, an AI-powered bookkeeping service founded in 2020 by David Phillips, has raised $7 million in a seed funding round led by Money Forward, bringing its valuation to $66 million. The company aims to address the growing accountant shortage in the U.S. as nearly 75% of Certified Public Accountants (CPAs) are expected to retire in the next decade. In 2024, an average of 430,000 new business applications were submitted monthly, a 50% increase from 2019, highlighting the increasing demand for accounting services. Fondo currently serves approximately 1,200 customers and has achieved $6 million in annual recurring revenue, having saved its clients over $75 million in Delaware Franchise Tax and helped them secure over $16 million in tax credits.
Fondo differentiates itself from competitors like Pilot and Bench by providing an all-in-one bookkeeping solution tailored specifically for startups. The company plans to invest the new funding into product development and automation, enhancing its service offerings to better meet the needs of its growing customer base. David Phillips, who previously sold Hackbright in 2016, founded Fondo to streamline bookkeeping and tax services, making them more accessible and efficient for new businesses. As the demand for accounting services continues to rise, Fondo's innovative approach positions it well to capture a significant share of the market.