Pilot Founders Jessica McKellar (CTO), Waseem Daher (CEO), Jeff Arnold (COO)
Accounting startup Pilot raised a new round of funding from Jeff Bezos and other Silicon Valley investors to help small businesses outsource administrative tasks.
The San Francisco-based company closed a $ 100 million financing round this week, doubling its valuation to $ 1.2 billion. The round was led by Bezos’ venture capital firm, Bezos Expeditions, and hedge fund Whale Rock Capital, with participation from Sequoia and Index Ventures. Stripe and its founders, Patrick and John Collison, as well as former VMware CEO Diane Greene, had previously invested in Pilot.
Its co-founder and CEO, Waseem Daher, interned at Amazon sixteen years ago before starting two other companies. One was bought by Oracle, the other by Dropbox. He compared the Pilot use case to a problem solved by Amazon Web Services: allowing developers to focus on building a business rather than figuring out how to host a website.
“There are all these annoying, tedious, scary and important back-office things that you have to do as a small business owner,” Daher told CNBC in an interview. “Owners should focus on running a business at scale, and Pilot should do the back office things for you.”
Pilot employees, mostly former accountants, are assigned to work directly with a small business. They take on administrative tasks like payroll, accounting, taxes, and invoices. The startup has partnered with companies like American Express, Bill.com, Gusto, and Stripe. Daher describes it as “technology-enabled”, but Pilot itself is not a software company. The company makes money from subscription fees.
Pilot’s revenue nearly doubled during the pandemic even though small businesses endured the brunt of the Covid-related shutdowns. The company’s revenue has roughly tripled each year since its founding in 2017, Daher said.
He attributed the recent growth to awareness of automation as people run their businesses from home. More millennials are also starting small businesses and tend to be more open to outsourcing through a technology platform, Daher said.
“People want to do this virtually. They don’t want to have to go to Main Street with their box of receipts and visit their accountant’s office,” he said.
Pilot is Daher’s third company with co-founders Jeff Arnold, Pilot’s chief operating officer, and Jessica McKellar, the company’s chief technology officer. The group met as college students at MIT in the computer club.
Index Ventures partner Mark Goldberg, an early investor in Pilot, met the group of founders at Dropbox nearly a decade ago. While the narrative in Silicon Valley is “focused on using software to optimize everything,” Goldberg said Pilot is taking the “opposite approach” by adding people back into the mix.
“Nobody creates a company to deal with BS in the back office. You want someone to extract that pain point,” Goldberg said. “People don’t want software, they want peace of mind.”