To serve 1 million of small-sized Brazilian companies, those with revenues of up to BRL 3.6 million a year, by 2025 is the goal of Conta Azul, a Brazilian accounting startup that was founded seven years ago by three young entrepreneurs from Joinville, the largest city in the state of Santa Catarina, Southern Brazil. “With that number, we can place Conta Azul among the top companies of the segment in the world,” reveals Vinicius Roveda, CEO and cofounder of the startup, alongside José Sardagna and João Zaratine, to LABS. The first big step in that direction was taken in 2018, the best year in the startup’s history until now.
In April of last year, Conta Azul received a contribution of BRL 100 million. The resources came in the fifth and biggest round completed by the company so far, categorized as a D Series and which was led by Tiger Global Management, a company from New York that had already invested in Conta Azul in 2015. In the agreement with investors, the company accepted the commitment to doubling its size in 2018 and maintaining its growth at a rate of 100% in the three following years.
Six months later, the startup announced an investment of BRL 60 million in the development and launch of Conta Azul Mais, the first part of its accounting cloud platform, as well as the acquisition of Wabbi, the virtual storage startup.
If the monthly task of balancing a client’s accounts (which includes the fulfillment of obligations, calculation of taxes, and generation of the necessary books) can take from 20 to 25 hours, the new platform promises to reduce the time to a single hour. Recurring demands, such as the generation of tax invoices and payment sheets, are automated. And, more importantly, the entrepreneur and accountant can view all the information in real time, something that, according to Roveda, isn’t offered as a solution elsewhere in the market.
In addition, the platform is also integrated to a series of financial institutions, such as Bradesco and Banco do Brasil; fintechs, such as Stone; and others that offer a series of solutions to services made available by Conta Azul.
Conta Azul Mais consolidated an important turning point within the company that began in 2017 and focused on engaging not only with small-sized companies, but also attracting those from the other side of the spectrum—accountants—as partners of the startup. “Our primary focus is to help the smaller enterprises to have control of their businesses and, at the same time, to renew their relationship with accountants, which can have a more active consulting role, that of intelligence,” explains Roveda.
Why considering small-sized businesses makes all the sense in the world
Conta Azul’s mission would be quite easy, if it wasn’t located in Brazil. In a 2017 study by the Brazilian Institute of Planning and Taxation (IBPT), it was revealed that, since the new Constitution of the country established in 1988, an average of 769 policies, among laws, provisory measures, normative instructions, constitutional amendments, decrees, and official declarations, changed on a daily basis in Brazil.
There is also the challenge of the lack of financial education and the consequences that this has for businesses: a third of micro and small-sized companies are accustomed to going out of business before completing two years for that reason.
At the same time, it is precisely those micro and small-sized companies that are responsible for generating more than half of the jobs available in the country.
It’s for that reason that the impact of our work can be huge for the country. The company that economizes time and improves management, grows and creates jobs.Vinicius Roveda, CEO and cofounder.
This year, the innovation platform Distrito listed a startup among those companies anticipated that will soon become unicorns—that is, those companies that reach $ 1 billion or more in market value.
Conta Azul already has 10 thousand partnered accounting offices and the goal is to double this amount by 2021—Brazil has 69 thousand active accountants, according to the Federal Accounting Commission. On the other side of the spectrum, more than 800 thousand small-sized companies have gone on to using Conta Azul.
The platform charges no fees for the partnered accountant, but is rather paid for by those small-sized companies interested in the services. There are four plans to choose from, with prices that range from BRL 89.90 and BRL 199.92, depending on the size of the company and the set of demands.
“The transformation of this market has arrived with quite some force during the past two years, but we have a window of five to seven years in which we will live a new reality,” anticipates Roveda.
New plans, new headquarters
In May of this year, Conta Azul changed headquarters, from an office of 2 thousand square meters to a much bigger one of 9 thousand square meters in Ágora Tech Park (Inovaparq), in Joinville.
The new space came at the right time. “Our biggest investment, given that we are a technology company, is in human capital and the biggest part of such an investment was made in 2018.” The company should finish 2019 with 500 employees.
For now, there are no expansion plans for other Latin American countries. “When you have a 20 million [companies] market, you don’t have to leave. Our mission is to make Conta Azul available for all small businesses,” says Roveda.
Translated by Axel Diniz