Aplos Software, which makes accounting and tax solutions for nonprofits and churches, has raised $4M in a Series A round of funding. The investor, San Joaquin Capital, is a newly formed venture capital firm specializing in technology companies based in California’s Central Valley. The firm’s partners believe that the 1.6 million nonprofit organizations in the U.S. are underserved from a technology perspective, and Aplos, with 20,000 client organizations already, is strongly positioned for additional growth.
Founded in 2009, Aplos has grown rapidly since launching its cloud-based accounting product in 2011. The company reached the milestone of 10,000 organizations using the software after 18 months, and passed 20,000 organizations in 2015. Organizations using Aplos include Kiwanis International and Assemblies of God. Aplos is forecasting to triple in size in 2016 and its client retention rates are 3x the industry norm.
Aplos has succeeded as a SaaS startup outside of Silicon Valley by being the first company to build cloud accounting software specifically for small nonprofits. Organizations of this size often use off-the-shelf small business software, which often aren’t designed to meet the financial reporting needs of nonprofits. Meanwhile, accounting software built for large nonprofits is typically expensive and complex, making it cumbersome to use for small entities with more straight-forward needs.
Building on a foundation of making nonprofit software that is cost-effective and easy to use, Aplos enhanced its offerings with new services for small nonprofits, including preparing IRS returns in 2012, donation processing added in 2014, and simple donor management added in 2015. The addition of funds from San Joaquin Capital will allow Aplos to accelerate and expand its product development efforts.
“When I founded Aplos, it was with the goal of providing technology that was easy to use that would help nonprofit leaders operate more efficiently and more successfully,” said Tim Goetz, CEO and co-founder of Aplos. “Six years later, we still get fired up knowing that nonprofit administrators and financial executives in over 60 countries are using Aplos every day to support the causes that are important to them and their donors.”
Aplos’s strong annual growth and ability to scale operations made it an attractive opportunity for investment firms. However, Goetz decided to keep it local. He teamed up with two other Fresno natives to form San Joaquin Capital and attract investment dollars from business leaders in California’s Central Valley. Aplos is the sole recipient of the firm’s first fund, the Whitney Fund, valued at $4 million. Drawing on investors based in the region, all $4 million was committed within three months. Aplos previously raised $3.4 million from an angel investor, bringing its total funding to $7.4 million.
“Aplos has such a clear trajectory that it made perfect sense for our investors. We couldn’t ask for a better example of an emerging tech company that will create jobs and spur economic impact in the Valley,” said Randel Mathias, a managing partner of San Joaquin Capital. “By supporting local and successful companies like Aplos, we can retain the region’s incredible talent and dramatically enhance our economy.”
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Tags: Nonprofit, Small Business, Software, Technology
