Small business owners are often the jacks and jills of all trades, especially when teams are small and operations are lean. But for many businesses, the time spent handling administrative functions could be better spent building the business. Ember is an accounting and tax platform that streamlines these functions with automation, freeing up valuable time. The platform uses machine learn and has integrated open banking so that businesses can manage all aspects of taxes and accounting from a single platform. Users are able to view the business’s finances in real-time, get support from qualified experts, and optimize, pay, and file taxes with HMRC, which recently made it possible to file digitally. Ember starts at a nominal £39/month, a fraction of what an accountant would cost. The company has already built a solid roster of startups as clients and looks to grow to 5000 businesses on the platform by this time next year.
London TechWatch caught up with Cofounder and CEO Aaron Shaw to learn more about the company’s progress since we covered their pre-seed round in late 2019, fundraising during the pandemic, the company’s latest funding round, and much, much more…
Who were your investors and how much did you raise?
It was a £1.6million Seed round led by Anthemis, alongside VC firms Innovation Nest and Spring Ventures.
Tell us about your product or service.
Whether you’re a freelancer, contractor, or entrepreneur, running your own business is tough. Alongside the demands of the day job, you find yourself having to deal with a mountain of admin: taxes, payroll, bookkeeping, reporting, compliance, and more.
At Ember, we use technology to automate these historically manual tasks, giving business owners the time and headspace to focus on the things that really matter. By leveraging open banking, machine learning, and HMRC’s making tax digital, Ember automatically categorises all of your bank transactions against their correct regulatory tax codes. Using that tax-categorised list, we then run the calculations in the background, allowing you to file your taxes directly with HMRC without ever needing to leave the platform or pay for an expensive accountant.
We exist to make launching, operating, and growing a business so simple that anyone can do it; empowering the next generation of ambitious entrepreneurs to take the leap and realise their visions.
We first started working on the problem at the end of October 2018. I was running a software development consultancy at the time and became incredibly frustrated by the amount of time spent focusing on the administrative side of running a business; accounting, tax, compliance etc. instead of actually doing what he set out to do; in his case – build software. Shifts in legislation through Open Banking and HMRC’s Making Tax Digital initiative, along with the proliferation of Machine Learning made it obvious that the process no longer needed to be so cumbersome and could be dramatically streamlined, even automated for people like me. Around that time, I moved into a WeWork space to start building out a solution – which is where he met Dan. At the time he was running the UK operations for a financial software company and had become increasingly frustrated with the clunky and manual nature of the software – from there we quickly hatched a plan that would soon become Ember.
How is it different?
We’re taking on the giants of the industry: Xero, Quickbooks, Sage – and we’re doing this by offering a radically different solution for small business owners.
The problem with these behemoths is that they were designed in the web-age, to be used in collaboration with an accountant. Laced with technical jargon like ‘debits,’ ‘credits’, ‘ledgers’, ‘journals’, and ‘accounts receivable’, it makes it impossible for anyone without a financial background to understand what’s going. As a result, business owners outsource this vital element of their business to accountants.
Accountants themselves seem to amplify the problem; with business owners typically paying upwards of £150 a month only to find themselves carrying out most of the work themselves.
We flip the problem on its head and say, ‘You no longer need an old school accountant to do your accounting.’ You can manage the whole process end-to-end with Ember in an automated, easy-to-understand way and if you do have any questions that aren’t covered by the platform, we offer live chat support and advice from experts in the field. It’s something that has resonated incredibly well with our early group of business owners.
What market you are targeting and how big is it?
We currently help small businesses of all shapes and sizes, from freelancers and contractors to high-growth startups of up to 10 people. It’s been amazing to see the range of different business owners in various industries using Ember to simplify and streamline their compliance obligations.
Having said that, our sweet spot has definitely been startup founders; ambitious, tech-savvy business owners who find themselves having to juggle tax, payroll, bookkeeping, and a hundred other things that crop up day-to-day. They’re the ones who have derived the most value out of Ember, as it gives them crucial time back to spend focusing on things that could make or break their business, like talking to users, building product, and closing sales.
Our sweet spot has definitely been startup founders; ambitious, tech-savvy business owners who find themselves having to juggle tax, payroll, bookkeeping, and a hundred other things that crop up day-to-day. They’re the ones who have derived the most value out of Ember, as it gives them crucial time back to spend focusing on things that could make or break their business, like talking to users, building product, and closing sales.
The micro-business market that we’re targeting is worth £3.7billion in the UK alone.
Some examples of the startups that have been using us include Free, Bendi, Flexa Careers, and Dualo.
What’s your business model?
We charge a £39 monthly subscription + £4 per employee on the payroll, making it substantially cheaper than the £150+ per month business owners typically spend on an accountant.
How has COVID-19 impacted your business?
Fairly minimally, we actually launched during the height of lockdown, in May 2020. Since then we’ve achieved proof of concept and organic customer growth, making some significant strides towards achieving our ultimate goal – the automation of accounting and tax.
What was the funding process like?
Much smoother than in our previous round. While a bit strange at the start, by the end of the process we actually enjoyed pitching over Zoom – it saved so much time darting all over London speaking to different people.
What are the biggest challenges that you faced while raising capital?
We’re tackling a huge market, and going head-to-head with the likes of Intuit, Xero, and Sage. I think some investors found that prospect quite intimidating.
What factors about your business led your investors to write the check?
- Timing – The proliferation of Open Banking, advancements in Machine Learning, and HMRC opening up with Making Tax Digital makes now the perfect time for a product like Ember.
- Team – Between Dan and myself, we have the perfect blend of deep technical expertise, domain knowledge, and experience with the problem from two separate angles.
- Product – The business owners currently using Ember love it. You can check out our Trustpilot reviews here: https://uk.trustpilot.com/review/ember.co
What are the milestones you plan to achieve in the next six months?
Our big goal is to reach 5,000 businesses by February 2022. We’re heads down to reach this. Within the next six months, we’ll be integrating with the likes of Shopify and Stripe, facilitating Open Banking payments for Payroll, Supplier Invoices, and Taxes, and streamlining our onboarding flow to help businesses get started with Ember faster.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
Speak to as many potential investors as possible. Even those who won’t write you a cheque will often have great insights which you can use to refine your proposition.
Where do you see the company going now over the near term?
We want to be the one-stop-shop for launching, operating, and growing a business. Making it super simple for anyone to incorporate a business, seamlessly manage all of their accounting and tax obligations while also receiving critical financial insights to empower them to make more informed decisions when it comes to growing their business.
What is your favourite restaurant in London?
Grilandia on Westbourne Grove.