Hey followers! Today, we’re diving into how technology is revolutionizing the world of professional services, thanks to some clever AI tricks and startup moves.
Back in late 2022, Noah Pepper, a former Stripe lead for Asia Pacific, started Multiplier to sell software for tax firms. But everything changed with ChatGPT’s arrival. Noah realized AI could dramatically boost how service firms operate, not just building SaaS but making them way more effective.
Multiplier’s first move was acquiring Citrine International Tax, a boutique cross-border tax service. They added AI to streamline work, which doubled Citrine’s profit margins pretty quickly. Inspired by that success, Noah decided Multiplier would buy existing service companies and equip them with AI, instead of just creating software from scratch.
This shift led to Multiplier, now called Multiplier Holdings, raising $27.5 million in seed and Series A funding. Lightspeed Venture Partners led the Series A, following an initial seed round by Ribbit Capital with SV Angel participation. This kind of strategy—acquiring and scaling service firms with AI—is gaining steam among investors like General Catalyst, Thrive, and Khosla Ventures.
Lightspeed partner Justin Overdorff highlighted that buying small companies is more effective since they’re more adaptable to change. Before acquisition, Citrine was just a two-person operation, but with Multiplier’s help, it grew and improved margins, setting sights on competing with the Big Four accounting giants through AI-powered tools.
Pepper emphasized that Multiplier seeks to buy high-revenue, leader-driven service firms eager to integrate AI for growth. The plan is to invest in ventures led by passionate entrepreneurs, betting on their potential to innovate and scale.
Overall, this approach—merging traditional service businesses with cutting-edge AI—is reshaping the landscape. It’s like a venture capital play, but for mature companies, with AI supercharging their growth and efficiency.