Startup Spotlight #6: It's All About Distribution
Today's startup is disrupting the embedded accounting space. But not the way you think.
About the Project
On the surface, Layer is a relatively standard platform where small businesses and entrepreneurs can manage their accounting. But it stands out due to its unique distribution model!
Layer can be described as “embedded” accounting. Developers of vertical (industry-specific) cloud services for small businesses can integrate Layer into their platforms. This allows their clients to manage their bookkeeping directly within the service’s dashboard.
For instance, a platform designed for managing hair salons can embed Layer’s accounting tailored for salons. Similarly, a system for beauty parlors can offer accounting optimized for beauty parlors, while a tool for managing dark kitchens can embed accounting for dark kitchens.
The key feature is that each version of Layer’s accounting is pre-configured to suit the specific needs of a particular industry. Plus, all operations conducted within the cloud service are automatically recorded in the accounting system.
If a company also conducts transactions outside the service, they can integrate other financial data sources with Layer, such as bank accounts via Plaid, payment gateways like Stripe, or payroll systems like Gusto. This creates a unified view of financial operations, both within and outside the service.
For businesses seeking a more hands-off approach, Layer offers full-service accounting and tax filing solutions. These additional services, provided by Layer’s specialists, are based on the data collected through the embedded platform.
Layer also supports migrating businesses from popular platforms like QuickBooks to its own system.
By embedding Layer, cloud service providers can charge their clients for these additional accounting features, sharing the revenue with Layer. This setup not only generates new income streams but also helps providers better retain their customers by tying them more closely to their ecosystem.
Integrating Layer is relatively straightforward. Developers simply add API calls to reflect operations and display Layer’s accounting interface within their service.
Founded in 2023, Layer has since partnered with four cloud service developers, giving it access to approximately 100,000 small business clients. The company recently secured $2.3 million in initial funding.