- October 6, 2020
- Posted by: kgrnaudit
- Category: accounting
The use and incorporation of technology have enhanced the performance of almost every field of work. Accounting is no different, with cloud-based and AI-enabled resources helping make accounting a whole lot easier. The use of accounting software not only helps reduce human error but also enables faster processing of reports and audits. As a result, around the world, we are witnessing a rise in the popularity of such resources. Just recently, Japanese cloud-based accounting startup named Freee saw a 300% surge in demand. Here’s a look at what you need to know about Freee and the rise in demand for cloud accounting, and how KGRN can help you with the same.
Freee Shoots Up By 300%
Daisuke Sasaki, CEO of cloud-based accounting startup Freee, has seen his company’s valuation grow to an unprecedented $3.7 billion. While they are yet to turn profitable, he knows that this news is worth celebrating, and says that the valuation does not put excessive pressure on him. Since going public on the Stock Exchange in Tokyo last December, Freee KK’s shares have almost quadrupled in recent weeks. The rise in demand for cloud-based accounting services and the advent of the Coronavirus is pushing prices up. As a result of the global pandemic, remote working has gone up exponentially, leading to the need for such cloud services. As a result, Freee’s stocks rose by an additional 1.3% on Monday to a new all-time high.
The Future Is Here
Sasaki also mentioned that he had not set a strict timeline by which the company should turn profitable. Since their business runs on a subscription model, the CEO said the focus was on reaching out to as many people as possible and growing their brand. The Japanese company is one of the several tech-related stocks that have witnessed significant surges due to the pandemic. With more and more people working remotely from the comfort of their homes, businesses are having to rely on more remote services. Accounting companies that offer cloud services have been witnessing a surge around the world. For instance, American accounting software company Intuit Inc reported earnings outdoing their recent estimates. All these surges have been due to more and more small businesses getting on-board with their cloud-based services.
As per a report by Daiwa Securities co, Freee has the best shares within the Japanese cloud accounting software markets. Their main competitors include Money Forward Inc within this space. However, Freee has been able to grow their subscriptions substantially over the last five years at a whopping 50% rate. They currently have over 220,000 users with sales surging by 53% by June 30th. Their CEO has made it clear numerous times that the company values acquiring new users over short-term profitability. He stated that out of Japan’s 6-million-strong small and medium enterprise industry, around 15% rely on cloud accounting. Freee aims to become a dominant player within this space and capture more market share.
However, experts differ with regards to their opinion on Freee, with several of them linking this surge in users to the COVID-19. Meanwhile, Sasaki views this as an opportunity to accelerate their efforts regarding the digitalization of their processes and tasks. He believes that the company is only getting started and that better things are right around the corner. Founded in 2012, the company began its journey with a Series A funding round a year later, making it one of the older Japanese startups. The company now offers both cloud-based accounting and HR services and employs over 5,000 certified accountants and advisors. As we can see quite clearly, digital accounting will be a vital part of every successful business in the future. So, what are you waiting for?
How Can KGRN Help?
KGRN Chartered Accountants is one of UAE’s most prominent Accounting and Audit firms. Our team of experts and accountants have the required experience and expertise to guide you on all matters concerning running a business in the UAE. Hence, our experts will ensure that your company maintains compliance, all the required reports are generated and that all your records are audited perfectly. Partner with us and usher in a new future today!