An Edinburgh-based accounting platform for small businesses is set to float on the stock exchange.
FreeAgent, which provides cloud-based accounting software and mobile apps for micro businesses with fewer than 10 employees, will list on the London Stock Exchange’s Alternative Investment Market (AIM).
The company issued an ‘intention to float notification’ in the city this morning as it seeks investors to “accelerate” its growth. The firm, which is based in offices in Fountainbridge in the capital, already has 52,000 customers, predominantly in the UK, and is targeting 5m micro businesses with its products. The market for financial management software for the sector is estimated to be worth £500m annually.
“With 5 million micro-businesses in the UK, FreeAgent is well positioned to transition micro-businesses away from relying on spreadsheets to manage their finances to taking a more automated and digital approach to their accounting,” said Ed Molyneux, Chief Executive Officer of FreeAgent Holdings.
“Developed specifically for micro-business, FreeAgent provides these businesses with a dedicated SaaS [software-as-a-service] solution that has the depth of functionality to cater for all of their business finance requirements, from time slips to tax returns and quality after-sales support.
“FreeAgent’s software already helps 52,000 business owners, providing the Group with excellent revenue visibility. FreeAgent’s differientated product puts businesses in charge of their finances, allowing them to see the big picture and automatically generating their tax returns.
He added: “We believe that the proposed Placing and Admission to AIM will provide the springboard necessary to help us accelerate our growth and to attract more customers through both our direct and accountancy practice channels, introducing the benefits of FreeAgent to thousands of other businesses.”
The firm’s growth plans rest on the changing labour market; with over 4m self-employed sole traders, who file their own tax returns and often employ accountants at considerable cost, a viable, automated alternative is seen by the company as a ‘key’ plank of its strategy.
The individual growth in use of mobile applications and the intention of government to digitise much of the tax and accounting filing process is also driving the company’s expansion plans.