Entrepreneurship is thriving in the U.S., with an average of 430,000 new business applications submitted monthly in 2024, marking a 50% increase from 2019. However, the availability of accountants to support these new ventures is dwindling. Nearly 75% of CPAs are expected to retire within a decade, and fewer graduates are entering the field, drawn instead to more lucrative careers in technology and finance.

Serial entrepreneur David Phillips sees an opportunity to bridge this gap with Fondo, his AI-powered bookkeeping platform tailored for startups and small- and medium-sized businesses. Founded in 2020, Fondo blends software, AI, and accounting expertise to simplify financial operations.

Fondo’s Growth and Success

Fondo has gained traction quickly, amassing 1,200 customers, achieving $6 million in annual recurring revenue, and becoming profitable. Clients include prominent names such as ElevenLabs, Karat, PostHog, Campus, and Limitless AI.

“To date, we’ve saved our customers over $75 million in Delaware Franchise Tax and helped them secure over $16 million in tax credits from the IRS,” Phillips said.

In a recent oversubscribed $7 million seed round, led by Tokyo-based fintech firm Money Forward, Fondo secured additional funding from Y Combinator, Motley Fool Ventures, Next Coast Ventures, a16z Scout Fund, and others. This round values the company at $66 million.

Differentiating in a Competitive Market

Fondo joins a crowded market alongside companies like Pilot, Digits, Finally, and Bench. However, Phillips emphasizes Fondo’s “all-in-one solution” as a key differentiator for high-growth startups.

“Startups often rely on separate services for bookkeeping, tax preparation, and financial analysis, leading to inefficiencies and higher risks of errors. Fondo combines these functionalities into a single platform, streamlining operations,” Phillips explained.

Leveraging AI and Expansion Plans

Fondo is focusing its newly raised funds on enhancing products and automation. The company is developing an AI agent to assist its team and customers, offering insights into financial statements, cash flow, and account analytics.

“We’re committed to evolving with the needs of startups,” Phillips said. This includes expanding analytics, integrating with other tools used by founders, and bolstering tax-saving options. Fondo also plans to support startups in scaling globally by navigating complex international compliance requirements.

Building for the Future

Currently employing about 70 staff, Fondo is actively hiring across product, engineering, and accounting roles.

With a mission to simplify financial management for startups, Fondo is positioning itself as a critical tool for the next generation of entrepreneurs while addressing the accountant shortage with AI-driven solutions.