Multiplier Holdings announced its public launch Wednesday (June 18), saying it had raised $27.5 million in seed and Series A funding to acquire professional services firms and enhance them by integrating its proprietary artificial intelligence automation.
The company is looking to transform additional tax, accounting, specialized advisory and other professional services firms, it said in a Wednesday press release.
“We believe the market will reward players who compete on technology-enabled client service through an integrated platform of people and tech,” Multiplier Holdings CEO Noah Pepper said in the release. “While our portfolio firms maintain operational independence, we align incentives across all stakeholders — from Multiplier leadership to firm leaders and staff — creating hybrid technology firms with exceptional client service, automation and quality that traditional firms using off-the-shelf AI solutions simply cannot match.”
The sorts of professional services firms targeted by Multiplier Holdings are part of a global market that is expected to grow at an 11.2% compound annual growth rate (CAGR) but face challenges that include a declining workforce, high labor costs and legacy technologies, according to the release.
Multiplier Holdings aims to improve these companies’ scalability and enhance their customer service by onboarding them to its AI-driven practice management platform and working with their domain experts while serving as a long-term owner, the release said.
The company worked with Citrine International Tax, an England and Wales-registered provider of U.K. and U.S. tax compliance and consultancy services, and within the first eight months, helped it more than double its cash flows while also eliminating a large amount of manual work, per the release.
Citrine International Tax Founder Gregory Trotman said in the release: “The Multiplier team immersed themselves into our workflows, built a custom end-to-end technology platform and worked with our staff to streamline everything from client onboarding to billing, resulting in a huge lift in productivity.”
Justin Overdorff, partner at Lightspeed Venture Partners, which led the company’s Series A round, said in the release that Multiplier Holdings’ approach may be a better path to modernizing an industry than vertical software-as-a-service (SaaS).
“Building an AI-native professional services platform from the ground up creates the most technological leverage and captures more incentive alignment between domain and technology experts than traditional SaaS,” Overdorff said.
PYMNTS reported in April 2024 that embracing automation and investing in innovation, including AI, could solve the labor shortage in the accounting field.
The accounting professional is suffering from ongoing attrition and failing to draw a new generation of workers, and innovation solutions may help meet the demand for accounting services.