Stop Charging for Software. Take Equity Instead.

01 /The Concept

Modus describes itself as "the right partner for ambitious accounting firms."

That description follows directly from what it does: it helps these firms grow – accelerating new client acquisition, streamlining back-office operations, and providing capital for expansion and acquisitions.

But the core of the offer is Modus's technology platform. The startup calls it an "operating system for modern accounting firms" – one that integrates existing enterprise tools and layers in contemporary AI capabilities.

One standout feature is what Modus calls partner "cloning." Firm partners get AI doubles – digital counterparts capable of delivering audit opinions and client communications in nearly the same style as the human partner. The result: partners don't write every deliverable from scratch but edit drafts prepared by their AI double, saving significant time.

Beyond that, the platform includes a suite of AI tools for automating routine tasks currently handled by staff and assistants: normalizing incoming client documents, sending and chasing invoices, scheduling partner calendars, and more.

Deploying these tools increases firm productivity by 40% and can double net profit – in part through reduced manual labor.

Modus emerged from nowhere recently, announcing an $85 million funding round – and simultaneously revealing an investment in an accounting firm that ranks in the top 200 in the US.

02 /Why It Matters

It's clear that AI can substantially improve the efficiency and profitability of accounting firms, where the majority of work is still done manually by expensive people. But why invest in those firms, rather than simply selling them the platform in the traditional way?

The lead investor in this round, a partner at Lightspeed Venture Partners, argues that the invest-and-acquire model is far more effective than software sales in this market. Partly because selling new technology platforms to old, conservative firms is genuinely hard. It's much easier to drive adoption from a position of ownership – as a shareholder who can push decisions from the inside.

But why not just build a high-tech firm from scratch and compete head-on with the incumbents? Because the incumbents' most valuable asset is client relationships built over decades. Trying to poach those clients is expensive at best, often impossible.

So the model in which Modus becomes a new shareholder of an existing firm is a genuine win-win. Modus gets an immediate client base to deploy its technology on; the firm gets tools that make it substantially more efficient.

Existing shareholders don't lose out on economics either. If Modus takes a 50% stake but the firm's profit doubles through platform deployment, the original partners come out exactly where they were – while Modus earns far more than any subscription would have generated.

This business model didn't originate with Modus.

Platform Accounting Group ([covered here](/review/a-umnye-vidjat-vozmozhnost)) was doing something similar years earlier – combining "local relationships with modern technology" – by embedding its platform in local accounting firms and acquiring the ones that hit growth targets. Platform Accounting Group raised exactly the same amount: $85 million.

More recently, Multiplier ([covered here](/review/unikalnyj-moment-kogda-dlja-masshtabirovanija)) raised $27.5 million by positioning itself as a "technology company that acquires professional services firms." The round came after Multiplier became a shareholder in its first accounting firm, deployed its AI tools, and showed early results.

The model can work across a wide range of professional services verticals. Pipedreams ([covered here](/review/makdonalds-dlja-uslug)) built a platform for HVAC installation and maintenance companies – and rather than selling it, only deploys it inside companies it acquires. Pipedreams raised $35.7 million, and after its last round declared it would stop raising equity altogether since the model already generates sufficient returns through debt financing. That's a strong signal the unit economics work.

03 /Opportunities

The broad direction: build AI platforms for professional services markets. These markets are still largely conservative, still heavily manual, and still wide open to efficiency improvements. Firms operating in them should theoretically be eager buyers of tools that raise their margins.

Except – don't sell them. Why collect modest subscription fees when you can own a share of the profit gains by becoming a shareholder?

What makes this model particularly interesting is that it only seems unusual right now. Logically, it's where things are heading.

Many in the AI industry already argue that the right pricing model for AI platforms is outcome-based – charging when the client actually gets a result. As that shift progresses, developers start caring about their clients' profitability, and clients get comfortable paying from the upside.

From outcome-based pricing to equity-based ownership is a very short step – one that will likely be taken soon, at least in the SMB segment, where owners are often willing to share governance in exchange for growth. And for many of them, there's another appeal: an equity partner creates a natural path to exit when they eventually want to retire or move on.

The more specific direction: build an AI platform that improves profitability for small professional services firms – and give clients the platform in exchange for equity stakes.

The catch: the platform developer effectively becomes a holding company operator, and will need to develop the competencies to manage that portfolio. That means different people and different internal tools. A different challenge – but not a less interesting one.

Which professional services category would you want to build your own holding company around?