DataSnipper, a software startup that automates critical tasks for accountants and auditors, has recently secured an additional $100 million in venture capital. This funding round values the company, which is six years old, at $1 billion, making it a coveted unicorn in the industry. The success of this investment not only highlights the current appeal of AI-related ventures but also foreshadows the significant impact AI will likely have on accounting and professional services overall. Index Ventures is leading the Series B funding round, with previous investment from Insight Partners in September 2022. Prior to this round, DataSnipper had been financing its growth through its own sales, and the company is proud to be profitable, which is quite rare among AI-oriented software startups. DataSnipper offers products that assist accountants in extracting data from various databases and documents, including receipts and invoices. It then connects specific data to cells in Excel spreadsheets and other software commonly used by accountants for auditing work papers and financial statements. By doing so, DataSnipper enables accountants to demonstrate evidence for the numbers in their spreadsheets. The company already utilizes AI to facilitate data extraction and automate certain accounting tasks, such as reconciling financial accounts with sales receipts from cash registers. On top of these features, DataSnipper is launching an AI-based chatbot-like assistant that will enable clients to ask questions using natural language. This assistant will assist users in locating specific evidence within documents. The shortage of trained accountants, particularly for audit work, has become a pressing issue. The accounting profession is facing a significant loss of experienced professionals due to the retirement of baby boomers. Approximately three-quarters of certified public accountants (CPAs) are currently nearing or at retirement age. In contrast, there is an insufficient number of younger individuals joining the profession. In 2022, only 67, 000 people took the CPA exam, which is 7, 000 fewer than the American Institute of CPAs had forecasted and the lowest number since the current version of the exam was introduced in 2006. This shortage affects not only accounting firms but also has a broader impact on the auditing of financial statements, internal controls, fraud detection, and certification of regulatory and fair trade compliance. DataSnipper is seen as a solution by accounting firms to retain their existing staff by reducing the time spent on time-consuming and monotonous tasks, which often contribute to burnout among accountants. This trend is expected to apply to other professions as well.

Economists argue that the discrepancy between the working hours of nonprofessional workers and professional workers in the US has been growing for decades. While blue-collar workers' hours have remained relatively stable, more than a quarter of professionals currently work over 50 hours per week, indicating a heavier workload than can be accomplished in a standard 40-hour workweek. These economists suggest that rather than rendering certain professions obsolete, AI could lower the cost of services and consequently increase demand. Additionally, while AI may improve individual workers' efficiency, it remains uncertain whether these efficiency gains will be sufficient to reduce the overall headcount of professional firms. One practical example of how AI can expedite auditors' routine tasks and alleviate their burden can be observed at Baker Tilly, one of the world's largest accounting networks. The firm is utilizing DataSnipper to automate much of the "ticking and tying" process. This involves verifying the existence of supporting documentation for each number in a document and providing a citation to substantiate the referenced data in the spreadsheet. In the past, junior auditors often spent countless hours on this task. With DataSnipper's capabilities, which can often complete the process within minutes, Baker Tilly's accountants have more freedom to engage in more valuable and fulfilling work, such as offering clients guidance on structuring transactions for optimal tax treatment. Karen Larsen, a partner in Baker Tilly's professional practice group, emphasizes that the adoption of DataSnipper is not about reducing the firm's workforce but about providing opportunities for personal growth, excitement, and ultimately staff retention. DataSnipper's reach extends beyond just accounting firms, as it is currently employed by all the Big Four accounting firms and utilized by internal audit and accounting teams at companies like Frontier Airlines, Siemens, and Hilton Hotels. The company aims to expand its target customers beyond the traditional financial statement preparation, financial audit, and tax teams. This includes teams focusing on auditing supply chains, carbon footprint accounting, and ensuring compliance with various regulations. While other companies, such as SAP and Wolters Kluwer, offer software tools to assist accountants and auditors, DataSnipper differentiates itself by often competing with outdated manual processes still utilized by many audit teams. This market opportunity has attracted the attention of Index, as the company believes the audit sector is underserved and still largely reliant on manual methods using tools like Excel. Hannah Seal, the Index partner leading the round, points out that DataSnipper's potential customer base can expand further into corporate internal audit and accounting teams. With the new funding, DataSnipper, currently employing approximately 130 people and headquartered in Amsterdam, plans to accelerate its expansion into global markets. While it already has an office in New York, the company intends to establish additional offices to serve the Asia Pacific and Latin American markets.