Yesterday the news broke that KashFlow has allegedly raised funding of £4 million from its existing 40% shareholder, Lord Young. It’s an interesting funding position – while we don’t know any details about how it is structured – it’s a significant amount of money and will allow KashFlow to scale up its operations quickly to counter the strong showing that its competitors in the UK, Xero and FreeAgent, are enjoying. Jackson made a statement that speaks to this – he said that;
I’m not going to load the company up with debt. If I take any form of loan I’d only take what I actually need, not a penny more
Which indicates a strong plan for short term expenditure.
I wasn’t previously aware of the funding round, but conversations I’ve had previously with KashFlow CEO Duane Jackson make much more sense now – Jackson alluded to some pretty herculean development initiatives as well as a significant beefing up of the executive team.
First onto what I know about the engineering. As I wrote about a couple of years ago – KashFlow is built on a relatively aged platform that makes life difficult when it comes to multi-user permissions and integrations. In the years since KashFlow was first built, much has occurred, especially in the world of APIs. KashFlow’s existing UI is a fairly classic approach towards interface’s and their existing API is a SOAP based.
KashFlow are therefore embarking on a significant project that will see the creation of a new REST API that will support XML and JSON, oAuth along with the aforementioned multiuser permissions. This project will occur whilst the old SOAP based API remains active – for the foreseeable future then KashFlow will be forced into supporting the old and the new API. This isn’t a fantastic position to be in and KashFlow intends to “encourage” partners to convert to the new REST based API.
I expressed some concern to Jackson about the risk of “re writing” the back end business logic in this project. Jackson told me that most of the KashFlow business logic sits at the SQL server end so the logic remains in place thus de-risking that part of the project.
In terms of how they will progress the re-write, Jackson told me that;
Initially the new UI/API will only support, say, Invoices and Quotes. And once that’s done we can make it available along side the existing app so we have multi-user permissions just for those areas of functionality. Then as we add new areas, they become “permissionable” too. Eventually, when we have all the features in there it replaces the existing UI entirely.
It’s an ambitious project – but one that, once complete, should see KashFlow delivering a highly extensible accounting engine that should see a number of opportunities open up – especially in the ecosystem and white labeling areas.
The second big ticket item that KashFlow is investing in is the executive team. First up is their new COO, Simon Guest. Guest was former Operations Director at large UK based business software house, Iris. Guest exited IRIS after a 15 year history, and directly following a private equity buy-out – this extensive experience will help KashFlow bring a greater degree of maturity to its operations.
I’ve been wondering for awhile how KashFlow would remain relevant in the midst of bigger and better funded competitors. While we don’t know until KashFlow starts delivering the fruits of this work – the two projects here indicate KashFlow really upping the ante.