In February, Detroit-based fintech startup Autobooks announced it raised $10 million in a Series A1 funding round! Investors included Draper Triangle, Baird Capital, Detroit Venture Partners, Invest Detroit and Invest Michigan. Autobooks provides online invoicing, payment and accounting software for the business customers of banks and credit unions. We spoke with Autobooks CEO and Founder, Steve Robert in March 2017 about the company’s $5.5. million funding round. We decided to circle back with him to discuss the company’s growth one year later.
First, congrats on your recent Series A1 funding announcement! Can you tell us a little more about Autobooks and the exciting news?
Thank you, yes we’re also very excited about the announcement of our most recent A1 round. Since closing our $5.5M Series A round last March, we’ve been deploying our solution into a new bank or credit union every month, and the pace of implementations is accelerating dramatically.
Autobooks provides “integrated receivables” which is a fancy way of saying, invoicing and payments – bundled into financial institutions existing internet banking experience. Before Autobooks, banks and credit unions struggled to compete for small business, as products like PayPal, Square, and QuickBooks delivered better experiences. Now, Autobooks helps these same financial institutions become a digital destination for small business, a single place for them to manage customers, send invoices, and collect payments – dramatically improving their cash flow. As money moves into or out of their account, we automatically reconcile it for them, producing real-time financial statements in the background. With improved financial health and forecasting, we also make it easier for them to qualify for a small business loan. Everybody wins.
Last year at around this time, we spoke with you about your first Series A funding announcement and your plans to open a Detroit office. Where is the company now, one year later?
We moved Autobooks into downtown Detroit in May of 2017. Thanks to our good friends at Detroit Venture Partners, they carved out some space for us in the iconic Madison building, which we’ve quickly outgrown, and hope to announce something soon on our expanding footprint downtown – as we’re committed to being in Detroit. We are also in the process of standing up an Austin office, as we already have several employees working remotely from the region.
You’ve received follow-on funding from most of the same Michigan investors, including Invest Michigan, Draper Triangle, Baird Triangle, Detroit Venture Partners, and more. Do you have any advice for other entrepreneurs about finding good partners to build a company with?
I’m happy to say, both rounds were over-subscribed and each of our existing investors participated in our latest round, with several increasing their position due to the positive momentum we are building in the business.
For us, it was important to find support in our region. We want this to be a Midwest story – proving great companies can be built and funded, right here. The challenge of course is we didn’t fit the mold. We’re doing fintech in Detroit. Our team is very experienced, and like Ann Arbor-based startup Duo Security, we were pressured to go to the coasts to find capital, better valuations, and founder-friendly terms. While it took longer than we wanted, we are thrilled to have investors here in the region support us!
In the early days, you’re running a series of experiments – you know it, they know it – so own it, and do it with conviction. Tell a compelling story, that captures the imagination of what is possible with your investors, and illustrate a bold vision for how you intend to make that possible. Why does the market need your solution, why are competitors ill-equipped, why is now the time – it also helps if you’re operating in a large market with prior relevant domain knowledge. Then wait to see who steps forward, their line of questioning, motives, and the desired role they’d like to play. We avoided firms with “all the answers” and opted instead for curiosity, integrity, and values. We wanted to work with people like us, that were genuinely interested in our space, even if they had never invested in it before – then work to stack the deck to give yourself an advantage. Seek a diverse group of investors, yet avoid ‘party-rounds’, you don’t want a noisy cap table with a bunch of small checks. Find firms/partners with operating experience, someone that has been in your shoes; find a combination of firms that focus on early-stage, later-stage (e.g. ability to write big follow-on checks) as well as strategics, and invite high-quality independent directors to your board that you can use to level up quickly. Be humble. Ask for help. That was the winning formula for us.
How will the venture capital funding be used to expand the company?
We are fortunate to have raised additional capital solely for the purpose of accelerating our momentum. We have a tremendous backlog of opportunities and many new channel partnerships coming online that will require us to grow the team to support additional product enhancements, larger deployments, and increased operational capacity. All very good problems to have.
What do you think has been a key factor in Autobooks success?
Without question, our success is contingent on our ability to attract and retain great people. We are building a culture of 10Xers – with a tremendous sense of urgency, purpose, and potential. People come here when they want to work with others that are as driven and passionate as they are – people looking to make an impact, measuring progress by their watch and not a calendar. While many have relocated to Detroit to join us, we also need to be able to provide a flexible work environment, bringing Autobooks to them when necessary.