Why We Invested in Tight

One key investment area for us is embedded finance, which is continuing its upward trajectory; the U.S. embedded finance market reached $29B last year and is projected to top $468B over the next ten years.

We have long believed in the potential for embedded, and our investment in Tight, an embedded accounting API that recently surpassed one million SMBs served, is a great example of both a sustainable business and the category’s long-term potential.

Co-founders Raj Bhaskar and Anu Bhaskar founded Tight after exiting their first company – an accounting platform for rental properties – to global real estate management software leader Yardi in 2010. The brothers had spent a decade building vertical-specific accounting, and they saw an opportunity for an embedded accounting API that could be tailored to any small business sector. 

There was just one problem. Embedded finance, as we know it today, didn’t exist back then. Embedded payments were just starting to gain traction (a la Stripe), and the market was simply too early for an embedded accounting API. So Raj and Anu went direct-to-SMB, building out Hurdlr, a full-service accounting solution for SMBs, on top of their API. In the process, they learned exactly what SMB owners and operators needed by fielding customer service calls and adding functionality that users requested. Raj and Anu designed their software to be extremely simple, without any learning curve. By year three, they moved from a free model showcasing their API to paying subscribers who loved the product and used it for their own bookkeeping. Then, in year six, Tight landed its first API customer. 

The market was finally recognizing what Raj and Anu had known all along: SMB owners and operators don’t want to use six or more applications to manage their business finances. They want one user-friendly, intuitive platform. By embedding APIs into their offerings, software companies and fintechs alike were able to provide customers with a suite of white-labeled services in a matter of weeks – creating an all-in-one solution without the heavy technical lift.

We invested in Tight for a number of reasons: we saw that the opportunity for embedded finance was growing, and we were impressed by Raj and Anu’s many years of directly supporting SMBs and knowing exactly what they needed in an accounting solution. Further, Tight was generating revenue from its subscribers while it doubled back into the API business through partnerships with vertical SaaS companies, fintechs, and banks. We believed then, as we do now, that Raj and Anu’s decades of experience building accounting solutions were a competitive advantage.

That was seven years ago. Since then, Tight’s growth has been nothing short of impressive. The company has reached 1.3 million SMBs to date through embedded partnerships with Bonsai, Collective, doola, Formations, Housecall Pro, Firstbase, Lettuce, Locality Bank, Nymbus, Tailor Brands, ZenBusiness, and many others. 

While their customers have raised hundreds of millions of dollars in venture capital combined, Tight hasn’t raised a funding round since 2018. At TTV, we prioritize investing in sustainable businesses and proven operators, and Tight has both of those in spades. The business was the strongest it’s ever been over the past four years, and the company is lifetime-to-date profitable with a strong balance sheet and no debt. This is especially important for an infrastructure provider, as partners want to know that the company is financially sound and will be in business for the long haul. 

We are proud to back Raj and Anu, who were the first to create the category of embedded accounting back in 2012, and we’re looking forward to continuing to support Tight as they continue to integrate with more vertical SaaS companies, fintechs, and banks. Tight was early to market a decade ago, but today, they’re helping their clients stay ahead.