Last year, ClearBooks jumped on the high valuation bandwagon enjoyed by the likes of Xero to launch a very limited public offering designed to raise some £800,000. At the time it was a ballsy move that turned out well since the company was able to close the offering in advance of the death date/time.
Late last week, the company released details of how it is getting along and it’s not too shabby. In the above video, Tim Fouracre, CEO provides some color on what they’ve achieved to date, using a slide deck to illustrate his points.
Aside from the homesy approach, details are sketchy. The most important slide can be found at 2:22. See below:
Regardless of the startup nature, the numbers are impressive. Parsing these back to the 6,000 claimed customers paying for the ClearBooks service suggests they are driving rolling revenue of around £130 per customer per annum. This is calculated after taking into account a claimed three percent in total revenue for special development that customers pay for separately in order to accelerate feature development.
The numbers don’t jibe exactly with ClearBooks pricing page but are close enough for us to assume that so far, the company has managed to earn full value from those who flip from a free trial to the paid for solution.
I’m less impressed with the fact Clearbooks plans on a break even position for 2013-14. Why?
Cloud based SME accounting is all about land grab. We know that the incumbent players are ceding all their organic growth to the new kids on the block but successful acquisition requires inventive marketing to a professional audience that has yet to reach a tipping point for adoption.
ClearBooks is less clear (sic) about future plans although it does say it wants to play nice with the professional part of the market. If so then it is joining a line of players already making that move.
Earlier in the month for instance, we noted that IRIS is disrupting its own KashFlow market. Free of its IRIS handcuffs, FreeAgent is plowing ahead with its ‘FreeAgent Friendly’ approach. Xero, which has become the marketing Big Dog, has a clear and aggressive approach to winning the professionals’ hearts and minds.
All of these initiatives require significant marketing and development resource, something all players are constrained by with the possible exception of Xero which holds a massive cash war chest.
Wind the clock back a few years and it was relatively easy to distinguish the main runners and riders from the depth of functionality, product direction and market approach. Today, they’re starting to look a tad samey. The difficulty for buyers comes in figuring out which will provide the best bang for the buck. This is where smart marketing kicks in and earns its crust.
The good news is that the UK market (at least) is large enough to support a small number of viable vendors. The trick will come in finding those Excel spreadsheet and fag packet users who are willing to move over to a more accounting oriented way of doing things while keeping things simple.