PandoDaily has learned that HR services company TriNet has completed the acquisition of expense management software company ExpenseCloud. According to sources with direct knowledge of the transaction, all documents were signed last Thursday, and the money was wired on Friday, making this a done deal.
While the transaction has not been announced, and financial details were not disclosed, our source indicates that all parties, including early investors and founders, made out very well. The company was largely bootstrapped, raising less than $500,000 during its three years in operation prior to acquisition. Early investors in the Los Angeles-based company included Mark Suster, Tom Erickson, and Paige Craig.
ExpenseCloud was one of the earliest applications in the digital expense management market, launching in 2008, and has since grown to over 3,500 corporate customers, the majority of which are small- and medium-sized businesses (SMBs). Not surprisingly given the acquisition, its notable users include several TriNet clients such as Nimbula, Coraid, and New Brand Analytics. Prominent non-TriNet customers include FrontLine Technologies, Acquia, Etsy, and JasperSoft.
According to its website, TriNet provides SMBs human resources, benefits, payroll, workers’ compensation, and strategic human capital services. With the addition of ExpenseCloud, as well as a second quietly announced acquisition of Accord HR, TriNet seems to be highly acquisitive. According to our source, it is generally looking to position itself as the “Workday for SMBs.” TriNet is majority owned by private equity firm General Atlantic.
ExpenseCloud succeeded in this hotly-contested market in large part due to the fact that it was the first third-party expense management solution to integrate with accounting software suites such as FreshBooks, NetSuite, and Intacct. Today, it remains the only expense solution integrated with Intacct and one of three competing for NetSuite’s customer base.
ExpenseCloud was also the first expense application to integrate with TripIt in 2009 to automate expense report creation based on travel itineraries. As frequent travelers and members of a small but widely distributed team, we can say from experience that solutions like these are essential.
The company’s biggest competitors are Concur and Expensify. With the financial resources and customer rolodex added by TriNet, ExpenseCloud would seem to be well positioned to dominate this market going forward. This is actually good news for the company’s current and potential customers, as the biggest risk of relying on nascent service providers is the high probability that they will one day go out of business.
Our source indicated that the acquisition and infusion of resources through TriNet will allow ExpenseCloud to accelerate its product roadmap and make further investment in additional customer support and sales staff. Post-integration into TriNet, ExpenseCloud will seek to “operate as Switzerland,” we were told, meaning it will continue to service the customer bases of TriNet competitors such as Paychex and ADP.
At the time of its acquisition, ExpenseCloud had approximately ten employees. It was co-founded in 2008 by Eric Sikola and Dan Fritcher, its current CEO and CTO, respectively. The company will continue to operate as an independent business unit (the first under TriNet) with its headquarters remaining in Los Angeles.
Pando Daily reached out to both TriNet and ExpenseCloud for comment. We will update if additional information becomes available