Automated accounting startup Ceterus has closed a $10 million Series B funding round, led by Harbert Growth Partners with participation from investors TechOperators, GroTech Ventures, Idea Fund Partners, and Alerion Ventures.
“We hope to leverage the funds by continuing to invest in our product. We raised our first round a little over two years ago, and with that, we did a lot to automate the process of bookkeeping,” says Levi Morehouse, founder and CEO.
“What we hope to do now is to continue that effort, but to move toward automating analysis and insights — giving the small business entrepreneurs that use our product visibility and analysis on what may happen in the future using all of the data that we have, related to the history of what they’ve done.”
Charleston-based Ceterus solves two problems with its automated one-stop accounting platform. First, it provides continuous bookkeeping services with features like automated QuickBooks data entry, month-to-month agreements, and tax planning and preparation, so entrepreneurs don’t need to manage their own books.
The platform also provides a benchmark reporting solution which provides information both on how the business is performing now against historical data along with how their business is performing against other similar businesses.
“The primary source [for our benchmark feature] is our own data, so there’s a network effect to us selling into a specific niche or vertical,” says Morehouse. “The more customers we get, the more valuable those benchmarks are to everyone else. That’s why our focus on these small business verticals is so critical.”
Ceterus has raised $20.2 million total since 2016, and while it took Morehouse a little while to get connected within the local venture capital community, his group of current investors is mostly Southeast-based.
“I wasn’t connected into the scene as a Charleston newcomer and my initial starting places were the Northeast and the West Coast,” says Morehouse of his initial venture into fundraising for his company. “Eventually, I got down to Atlanta and Raleigh — now our investor group is based in Richmond, D.C., Atlanta, Raleigh and Charleston. They’ve been very supportive.”
“Ceterus is an early mover in what is quickly becoming the new era for accounting,” said Wayne Hunter, co-founder and Managing Partner at lead investor Harbert, in a statement. “We are thrilled to partner with Ceterus, a company that is building a solution that prepares small businesses for the future.”
Up next, Morehouse and his team hope to incorporate machine learning and artificial intelligence into Ceterus to provide a full 360-view of how the business has performed in the past and where it’s going moving forward.
“We want to help the entrepreneur make better decisions about what to do today and what to do tomorrow as opposed to just telling them what’s happened in the past,” says Morehouse. “A lot of investment is going toward taking the data and the automation we’ve built and start to build tools to look forward. We want to provide forward-looking analysis, insight, and ultimately, advice.”