Online accounting Business Service Provider (BSP) Virtual Growth announced Wednesday (Nov 29) that it has closed on $21.5 million in Series C financing.
ETF Group, a global venture capital group, led the round. Other participants include Citigroup Investments Inc., Bessemer Venture Partners, StarVest Partners, L.P., Chelsea Capital Partners as well as strategic partner Administaff Inc. (NYSE:ASF).
This new round of funding will allow Virtual Growth to further enhance its Virtual Accountant web-based bookkeeping and accounting offering, expand its new regional headquarters in Columbia, South Carolina, and further develop its channel marketing programs.
“We see an enormous market opportunity for Virtual Growth’s business model which combines outsourced accounting services with an ASP delivery model,” says Michael Sheldon, president of ETF Group “Customers we spoke to were extremely pleased with the product and the quality of service. Combine this level of enthusiasm with an excellent management team and a market potential of five million SMB customers in the U.S. — not to mention international markets — and you’ve got an extremely attractive business uniquely positioned to scale globally.”
Virtual Growth’s mission is to deliver automated and integrated business solutions for small and medium-sized companies so they can enhance productivity and concentrate on core competencies. Virtual Growth’s first solution, Virtual Accountant, combines an ASP delivery model with outsourced accounting services, featuring web-based enterprise-class financial software and teams of trained accountants assigned to each client.
“We’re strong supporters of the web-based accounting category, and Virtual Growth’s value proposition remains unique in the market,” notes Jeanne M. Sullivan of StarVest Partners. “The service component differentiates them from other companies in this area. Their expertise in accounting infrastructure and delivering bookkeeping services in addition to software is a significant competitive advantage.”
“This round of financing has been more challenging than it was for our Series B round because investors are taking a harder look at their target companies,” said Stephen King, CEO and founder of Virtual Growth. “We were successful in securing funding because we have all the necessary fundamentals in place to prove our path to profitability – real revenues, real margins, real customers and an excellent management team.”
Virtual Growth’s web-based service, Virtual Accountant, is gaining market share, King said. “We launched with 30 clients actively using the service, and are already exceeding our sales goals.”
