Translucent: the CFO super-app to rule them all?

One year in, multi-entity accounting app Translucent has garnered impressive investment and client interest. 

A pre-seed investment round in March 2023 raised £2.7m ($3.3m), led by Venture Capitalist firm Local Globe, which has previously backed the likes of Wise and Zoopla. There are also several angel investors, such as co-founder of and former CTO of Xero Craig Walker, co-founder and former managing director of Xero UK Gary Turner and founders from GoCardless, Ignition and Hubdoc. More recently a further £5m was raised in August 2023, this time led by Chalfen Ventures alongside Local Globe. 

All this for a service that company founder and CEO Michael Wood says has yet to be properly promoted. 

“We've been quite stunned by just how much inbound interest we've had; definitely way more than I predicted at this stage, given we haven't really turned on sales and marketing yet,” comments Wood. “We haven't really told the world that we exist yet.” 

Despite the early success, the roll out hasn't been without its challenges - although Wood suggests they are more to do with running a business than the focus of the app. 

“Challenges haven't been accounting related,” he explains. “The story of the first year has just been about building a team to build what we think will be a very large business. We've been busy hiring, busy coding and busy developing the first version of the product.”

With one multi-million-pound start-up already under his belt, Wood has gained insight that will help him plan for success with Translucent, for example knowing not to get carried away with hiring to promote growth.

“It's the fact that software companies built from 2010 to 2022, we were very much encouraged by the capital markets to prioritise growth at all costs,” he says. “That prioritisation meant there was an awful lot of adding headcount, if growth is what you're trying to do. It's quite easy to solve that by adding an extra salesperson or adding an extra engineer. And so, you then get the situation that we have now where an awful lot of large software companies aren't profitable. Or are very profitable because they have such a large headcount.  

“They now have an issue of how to reduce headcount. We've seen it with Google and Facebook and others - and most aggressively Elon Musk at Twitter X, but lots of other companies are looking at how they can reduce headcount. Any companies being born in 2022 to 2023, like Translucent, have to re-think that sort of mindset of continually adding headcount in the way we all did 10 years ago - it's not the right way to do it.” 

“I'm interested in what one can build with a smaller team, not a small team, but a smaller team. We're definitely building where we think we're laying the foundations to build a big company now without necessarily going mad on hiring.”

Wood formerly co-founded Receipt Bank, now Dext, which automatically extracts data from receipts and invoices for SMB users. After a very profitable sale of the business in 2021 to Hg Capital, he re-entered the business space to solve an issue plaguing many expanding businesses. 

Translucent, which is positioned as a “CFO super-app”, is aimed at solving the complexities of keeping track of finances across organisations with multiple subsidiaries, industry focuses, operations or locations. 

“Most businesses are stitching together the SMB accounting solutions, so they might be running multiple copies of Xero or if they're in multiple countries, they might be for example running Datev Germany, Exact in the Netherlands, and Sage in the UK,” he explains.  

“We're seeing, actually, that SMB accounting softwares are absolutely fantastic. There's no need to move to a bigger solution. But, if you're multi-entity, you do have a problem. And so, what we're doing is we sit on top of those SMB accounting softwares.” 

“The first problem we solve is we give them a single financial system of record, because of course right now their data is fragmented across multiple softwares. And the second problem we solve is we give them an app stack that they can use wherever and with whichever accounting software they use or in whichever country they're in.”

Translucent currently offers five different apps. The first they offered was ‘Search’, meaning, as Wood commented: “For the first time ever, businesses can have all their transactions, all their journals, and all their invoices all in one place, and they can search against those.” 

Another app, ‘Group Reporting’, facilitates reports to be pulled together from multiple entities live or at the end of a week, month, or quarter. ‘Live Sheets’, meanwhile, allows clients to connect their data from Google Sheets and Excel. And lastly, ‘Intercompany’ helps to automate intercompany journal entries. 

Translucent is also working to offer ‘Bank Consolidation’, among others. “We’re building apps for basically every different workflow,” Wood adds. “We have got a longer list of 30 apps that we expect to build.” 

Finally, on the topic of competitors and Translucent’s position in the market, Wood says: “Nobody's done this before. There are an awful lot of reporting apps that do consolidation or group reporting - whether that's the likes of Loconet in Europe or the likes of Spotlight and Fathom in the Xero and QBO ecosystems - no one has properly looked at multi-entity as a customer niche that has problems that need to be solved, so we're very excited to be helping an awful lot of businesses.”

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