Canopy Raises $35 Million in a Series BB Round of Funding

Draper, Utah-based Canopy has raised $35 million in a Series BB round of funding.

In its news release announcing the funding, Canopy explained that its latest capital infusion was led by Connecticut-based Ten Coves Capital along with significant investments from four current investors

  • One out of Utah: Cottonwood Heights-based Pelion Venture Partners, and
  • Three out of California: NewView Capital, Tenaya Capital, and Ankona Capital.

According to Crunchbase, Canopy has now raised $153 million since its founding in 2014.

What Does Canopy do?

Canopy says it helps accounting firms increase efficiency and boost revenue through its cloud-based practice management software suite.

According to its announcement, Canopy "... offers tools for client management, document management, workflow, and time & billing, as well as specialty compliance solutions that help accountants obtain IRS transcripts and resolve notices quickly."

Is it any good? Personally, I have no idea.  

BUT ... CPA Practice Advisor gave Canopy's Transcripts Tool a 2021 Tax & Accounting Technology Innovation Award.

Additionally, named Canopy to its list of Best Accounting Practice Management Software programs for 2021.

Canopy's Market Opportunity?

According to the American Institute for CPAs, there are currently over 46,000 public accounting firms in the United States.

Of the nearly 1.4 million U.S.-based accountants and auditors identified by the U.S. Bureau of Labor Statistics, NASBA (the National Association of State Boards of Accountancy), close to 670,000 of them are actively licensed Certified Public Accountants today.

Canopy summary video downloaded from YouTube 12 December 2021.

So ... given Canopy's gross price point of over $1,500 for its current suite of accounting and practice management tools, that puts the company's U.S. Total Addressable Market (aka, TAM) of somewhere near $2 billion annually.

Clearly, Canopy's actual SAM (Sales Addressable Market) would be lower than that. But that's also assuming that

1. Only Accountants or Auditors use Canopy's apps, and
2. That they're only working in the U.S.

To be clear, I may be way off base with my back-of-the-napkin TAM and SAM analysis here.

Then again, I also think it's pretty clear that Canopy has hit on a good opportunity here.

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