Noah Pepper, former Stripe business lead for the Asia Pacific region, established Multiplier in late 2022 with the intention of selling software to tax accountants. However, with the introduction of ChatGPT, he realized the transformative potential of AI in professional service firms’ technology utilization.
The startup’s acquisition of Citrine International Tax, a specialized provider of cross-border tax accounting services, marked a turning point. By integrating Multiplier’s AI capabilities, Citrine witnessed a significant increase in profit margins, prompting Pepper to shift the company’s focus towards acquiring and enhancing existing professional service businesses with AI solutions.
Under its new name, Multiplier Holdings, the company announced securing a total of $27.5 million in seed and Series A financing. Lightspeed Venture Partners led the Series A funding round following a seed round led by Ribbit Capital and SV Angel’s participation.
Multiplier is part of a burgeoning trend where startups acquire service businesses and leverage AI to drive growth. This strategy, reminiscent of private equity roll-ups, has attracted investments from prominent venture capital firms like General Catalyst, Elad Gil, Thrive, and Khosla Ventures.
Lightspeed partner Justin Overdorff emphasized the effectiveness of this approach, especially when implemented in smaller companies that are more receptive to process changes. Multiplier’s success story with Citrine, a 12-person tax accounting firm, illustrated the potential for growth through AI integration.
Looking ahead, Multiplier aims to expand beyond personal tax compliance and develop an AI-powered alternative to the leading Big Four accounting firms. Pepper highlighted the company’s focus on acquiring high-recurring-revenue service firms with leaders enthusiastic about leveraging AI to propel their businesses forward in the competitive landscape.
