We’ve all been there — it’s tax season and you’re staring at a crumpled pile of receipts, possibly-inaccurate mileage numbers on the back of napkin, and scribbled deductions on your desk. As a business owner, organization is key to get the best possible scenario out of your tax preparation and prevent audits down the line.
Durham, North Carolina-based startup Shoeboxed helps businesses go paperless for their taxes by providing receipt scanning and organization, expense reports, business card storage, and mileage tracking. The software extracts data from scanned receipts, turning it into fully searchable, human-verified information and making tax season more seamless for the accountant, bookkeeper, and executives.
CEO Taylor Mingos, along with his co-founder and CFO Tobias Walter, grew the business during the economic recession and pivoted a few times before focusing on their customers’ need for receipt tracking. Their latest product, Fetch, helps entrepreneurs keep track of expense reporting and employee reimbursement with a 5-minute set up via the app.
“By going after small- to medium-sized businesses instead of very large organizations, we are able to tailor the product to the custom needs of smaller, niche companies,” says Mingos.
Mingos shares the challenges they faced when trying to raise funding during the recession, how their new product can streamline employee reimbursements, and their experience growing the company in North Carolina.
What problem are you solving?
Receipts are a pain to keep track of, but they’re important for small business owners to hang on to. Shoeboxed is the easiest way to get both paper and eReceipts digitized and stored in a secure and searchable online account.
How’d you get the idea for it?
The idea for Shoeboxed came from being around small businesses and seeing the struggle of tracking receipts. We knew there had to be a better way manage them than keeping piles of receipts in a shoebox — hence our name.
You raised your Series A round during the recession — how did you do so during such an uncertain time?
Shoeboxed received a Series A funding round back in 2008 and a Series B in 2011. The process of pitching venture capitalists in 2008 was a daunting task considering we were in one of the country’s worst economic recessions.
The economy was in such terrible shape that many VC’s we met with didn’t even have money to invest. We pitched dozens of firms, but it felt like hundreds. We found Novak Biddle Venture Partners and haven’t ever looked back. They’ve offered us the freedom to pursue our own vision for Shoeboxed while still providing helpful mentorship and guidance.
How does the platform work and what are the main features?
We designed Shoeboxed to move messy receipt tracking into an organized digital account. Our users can upload pictures of receipts with our mobile app, forward e-receipts to their account and mail paper receipts to us to scan. After a receipt is uploaded, our system extracts the date, vendor name and total before it is placed in the user’s account. Our system is great because users can categorize their expenses and run reports to get details on their spending.
Our Magic Envelopes are our most popular submission method. We send out prepaid Magic Envelopes for users to stuff full of receipts and toss in the mail. We then scan the receipts in our facility in Durham, NC, and upload them to the user’s account. It’s an easy way for them to get rid of all that clutter and get back to work knowing that Shoeboxed has them covered.
What’s your revenue model?
Shoeboxed uses a monthly subscription fee based on the number of receipts scanned each month. Plans start at $15 a month and go up $125 a month for 1,000 receipts. For those who don’t mind data-entering their own receipts, Shoeboxed offers free digital storage forever. Fetch is billed at $9.95 per active user per month.
Who are your competitors and how do you stand out?
Our primary competitors are actually document scanners that people keep on their desks. We stand out a couple ways: 1) We human verify the data that we extract from receipts, so our accuracy is extremely high; 2) We have a lot of submission methods. If you have a receipt, you can get it into Shoeboxed without having to scan it yourself. Whether it’s our mobile app, email submissions, desktop uploader or our Magic Envelopes, we make it easy to get your receipts organized.
3) Unrivaled customer support. You will always be able to talk to a real person at Shoeboxed who is invested in making sure you have a great experience. No robots here.
Have you pivoted or made product development decisions since your inception? If so, how did you handle it as CEO?
We have definitely pivoted. Shoeboxed originally had a social shopping component which we thought would help with organic referrals and virality. We ended up seeing that people were much more interested in the receipt tracking aspect of our service instead of the social aspect. After figuring that out, we doubled down on receipt capture and vowed to be the easiest, most efficient digital receipt archiving service on the market.
What are some of your recent accomplishments as a company?
In August 2017, we launched a new product, Fetch, which takes the pain out of reimbursing employee expenses. We noticed how some users were using Shoeboxed to track expenses for a team of employees, and knew there was an opportunity for a new product.
With Fetch, we’re revolutionizing how employee expenses are reimbursed and doing away with excel-based expense reports for good. Since our launch, Fetch has become very popular with companies who have between 15-100 employees who generate monthly expenses.
Any leadership lessons that you’ve learned as a startup CEO?
Culture is extremely important. It’s easy to keep the team close when it’s only a handful of employees but as the team grows, you have to make a concerted effort to foster a close-knit culture. A magnificent culture is one of our biggest strengths here at Shoeboxed and it’s been both the magnet and glue that helps us hire and retain top talent.
What are your thoughts on growing your company in the Southeast?
Being located in Durham is magnificent. We’re close to a lot of great universities which makes hiring much less of a pain than it is in other parts of the country. Durham is a thriving startup scene which is hot on the heels of Silicon Valley. We love being in an area where there are plenty of people working through similar challenges to us. I could never see Shoeboxed leaving Durham.
Anything else in the works for Shoeboxed in the next 12 months?
We’re currently busy with tax season here at Shoeboxed headquarters. We process millions of receipts between January and April and it is our busiest time of year.
Tax season requires proper prepping to make sure everything runs smoothly and our turnaround times on receipts is within our standards. In addition to tax season, we’re also planning a large overhaul of the Shoeboxed mobile app and working on growing Fetch’s customer base. 2018 is already shaping up to be one of our biggest growth years at Shoeboxed.
