Canopy raises $35M in latest funding round

Cloud-based practice management software provider Canopy announced Wednesday it has raised $35 million in a Series BB funding round, which brings its total funding to date to $127 million.

This round’s investors included Ten Coves Capital, along with funding from current investors NewView Capital, Pelion Partners, Tenaya Capital, and Ankona Capital.

“This new funding will be used to further accelerate Canopy’s mission to become the default operating system for accounting firms,” said Canopy CEO Davis Bell in a statement. “To accomplish this, we will take Canopy’s best-in-class practice management suite ⁠— which includes modules for client management, document management, workflow and time and billing ⁠— to the next level, particularly with larger firms. We also plan to continue building integrations with many of the applications that accountants use, to more effectively serve as the backbone of their practice.”

Bell explained the latest investment into Canopy’s cloud-based product development will propel the company’s mission to disrupt the accounting software industry. “We know accountants are eager to transform their firms to deliver higher value advisory services and streamline the mundane parts of their business,” Bell said. “It’s clear that legacy market solutions can’t enable this type of transformation. Modern accounting firms need cloud-based, user-friendly, mobile-accessible software that provides an integrated and holistic approach to managing their clients and work.”

In June, Canopy announced an $11 million funding round that was also geared toward product development, with plans to enhance document management, CRM and client portal, workflow, time and billing, and payments and invoicing. This has aligned with Bell’s goals since he became CEO in December 2019, taking over after Kurt Averell’s departure.

Over the next year, Canopy will be focused on five key areas, according to Bell: interoperability, automation, collaboration, insights and customization.

“Our vision for Canopy is that it becomes the system of record by which accounting firms manage their work and their clients,” he explained. “So naturally, we view Canopy as a platform, or centralized hub, to which all of your devices and other software solutions can connect. We plan to further develop our API and integrations to facilitate this.” To achieve this, Canopy will be adding more automation in 2022, particularly within its workflow module, and improving the software’s customization. “We want Canopy’s software to work on our customers' terms, not ours,” Bell said.