— Devdutt Yellurkar
Today’s acquisition of Wave by H&R Block is a terrific story about both an incredible journey and a fantastic future. I first met Kirk Simpson and his co-founder James Lochrie in Toronto in the summer of 2011. The two founders had an audacious vision of disrupting the accounting & booking keeping industry for small businesses. At the time, the SMB market was considered quicksand. Strike one. And to make matters even more challenging, Kirk had a plan to give away his software for free. Strike two.
Kirk and James, however, ranked off the charts on CRV’s founder quotient scale. CRV led the series A financing in 2011.
From the very beginning, it was apparent that the founders had a clear understanding of their customer — SMBs with under 9 employees — and that segment’s unique needs. The product was loved by customers, and the new businesses that were coming onto the platform were driven mostly organically. But the first few years at Wave were challenging because the product was loved and usage was growing but the ad-driven monetization model wasn’t scaling well. After multiple board discussions (as well as post-board whiskey sessions), it was clear that Kirk was unwavering on his promise to keep the accounting software free.
In 2015, Kirk decided that underlying accounting data was rich with information about how important cash flows were in order to make his customers successful. In order to improve their customers’ businesses, Kirk & team designed and built a suite of financial services that would both greatly benefit the customers and Wave’s revenue potential.
The rest is history. Today, Wave has 400,000 engaged micro-businesses on their platform. They offer payroll, payments and a host of other financial services. The network effects have just started building. With its acquisition by H&R Block, one of the largest tax services in the world, the Wave team is really just getting started. We are excited to watch them as they continue to create a new future for this segment of SMB space.
Over the last 49 years, CRV has had the privilege of backing more than 400 founding teams, and we are proud that more than a 150 have either gone public or successfully exited. All, like Wave, begin with an authentic founder who relentlessly pursues a vision and has the ability to break down any and every wall that gets in the way. Founders like Kirk truly exemplify the entrepreneurial spirit.
Congrats Kirk & team Wave! We are excited to see you take Wave to the next level.