Brazil’s Contabilizei Raises $60M in Softbank-Driven Series C

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Accounting services firm Contabilizei announced on Thursday it had raised $60 million in a Series C round led by SoftBank. Goldman Sachs and Pruven Capital also participated in the investment.

Vitor Torres, CEO of Contabilizei, says the goal of the round is to expand the startup’s service and product offerings. Contabilizei emerged in 2013 to help micro and small business owners to open a company for free and keep their accounting up to date.

The startup acts as an accountancy, helping entrepreneurs with invoices and calculating taxes. As the company grew, Torres said he saw an opportunity to expand its products to include “helping the entrepreneur open a bank account and receive money from clients”, but also helping entrepreneurs choose health insurance for themselves, their family and their employees.

The digital accounting firm has taken steps into the physical world and added phone support with service until 10pm, and opened physical stores in the Shopping Eldorado mall in São Paulo and Barra Shopping in Rio de Janeiro.

“We are expanding our reach to micro and small entrepreneurs so that they can ask us questions for free at the mall while they have a coffee and do their shopping,” Torres explains.

Contabilizei’s plan is to expand the physical presence in stores within malls to more than 60 cities throughout Brazil.

The Next Step

Moving toward offering more and more financial services to its clients, Contabilizei has already launched a checking account product through a partner company. More than 40% of Contabilizei customers already have an account with the partner company, and more than 80% of new customers choose to open a current account with Contabilizei when they start their business.

However, Torres wants this service to be Contabilizei’s own, “That’s the big next step for the company, to have financial solutions from Contabilizei to help the micro-entrepreneur”.

Asked if the company will become a direct credit society, Torres said that he is “studying the models and today the path is still to be defined”.

The dispute for the financial services market aimed at legal entities has grown in Brazil, with players including Cora, Conta Simples and Clara. “Obviously, we will end up touching some points of the market, but always keeping in mind that our main service is with our client, helping to manage all their administrative and financial back-office”, Torres said.

The company currently has more than 30,000 clients, while the more than 70,000 accounting offices in Brazil serve an average of 80 to 100 clients, according to Contabilizei’s CEO.

Contabilizei has more than 900 accountants, and with this investment the startup should exceed 1,300 employees. The startup charges a monthly fee with plans from 96 to 350 reais ($19-$69), depending on the size of the company in terms of turnover.

“Our focus is on micro and small companies, which are 90% of the 17 million companies, in Brazil,” Torres said.

‘A Strictly Brazilian Problem’

Among the startup’s plans for the coming years is an IPO in Brazil, because, Torres says, Contabilizei works with a strictly Brazilian problem.

“Micro and small business owners contribute more than 30% to GDP, and generate more than 50% of the formal labor force. If this micro and small business owner succeeds, the country will succeed. This is our great purpose,” he says.

Contabilizei does not disclose revenues, but said it grows two-fold each year. According to Torres, the accounting office in SaaS (Software as a Service) format differs from other software companies because it “positions itself much more as the right arm of the micro and small business owner”.

“We help them on their journey in an ethical way, and we believe in a long-term relationship. We employ a lot of technology, which allows us to spend more time with our client and less on manual tasks.”

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