Why Buy Accounting Firms Instead of Selling Them Software

01 /The Concept

Multiplier is a technology company that acquires and transforms professional services businesses operating in what it calls "high-stakes" categories.

"High-stakes services" means work where the quality of execution matters deeply to the client – and where attention to client needs directly determines outcomes. In knowledge-work terms, this includes bookkeeping, tax preparation, auditing, and similar disciplines.

The startup's thesis: every successful professional services firm will eventually become a technology company. Two forces are accelerating that transition. On the supply side, these firms increasingly struggle to hire – not because demand has surged, but because too few young people want to enter these fields, and the experienced professionals who built them are nearing retirement. On the leverage side, AI lets firms deliver faster without sacrificing quality, growing revenue while keeping headcount stable.

From that premise, Multiplier defines its mission as maximizing the output of every human employee – hence the name. In concrete terms, the key metric is revenue per full-time employee, with AI doing the work of growing that ratio.

Multiplier claims its technology enables something that previously seemed impossible: "radically" expanding client capacity while maintaining the high service quality that retains those clients.

To prove the model, the startup acquired a firm specializing in international tax planning and compliance. In the eight months since the acquisition, the firm's revenue grew 2.5x – driven by reducing manual labor and redirecting that freed-up time toward client acquisition and service.

One distinctive element: a substantial portion of the revenue gains went back to employees as performance-based bonuses, which predictably helped retain high performers and sharpen motivation.

For a sense of the scale of change, one employee at the firm described processing 14 tax returns in 14 hours before the Multiplier system. After implementation, she handles 24 returns in 10 hours – and uses the freed time for client-facing work.

Investors apparently considered one acquired firm sufficient proof of concept: Multiplier has now raised $27.5M in its first funding round.

02 /Why It Matters

That funding amount reflects the scale of the market being targeted, not just the results at one firm.

The global professional services market was valued at roughly $6 trillion in 2022, with projections pointing to $7.5 trillion by 2027 and $10 trillion by 2032.

One of Multiplier's investors has noted that the strategy is likely to work best with small firms – where new technology can be adopted faster and with fewer organizational obstacles, compared to larger firms where entrenched processes and internal resistance slow everything down.

The firm Multiplier acquired had 12 employees at the time of purchase. Since then, it has not only expanded its margins – it has grown its headcount, partly because it can now afford to pay meaningful bonuses funded by those improved margins.

Importantly, Multiplier did not raise capital to fund that acquisition. It likely negotiated favorable terms structured around future profit growth – an arrangement that only really works with small firms. So the small-firm focus may serve a dual purpose: faster integration and lower acquisition cost.

The beauty of the accounting market specifically: 90% of firms in the US are small.

And the market itself is large. The US accounting services market is worth $145 billion and includes more than 85,000 firms – a deep pool of potential acquisition targets.

That pool is large enough for multiple players. Platform Accounting Group – [covered previously](/review/a-umnye-vidjat-vozmozhnost) – raised $85M in its seed round last February on a similar model. It identifies small accounting firms, deploys its technology platform, and centralizes certain tasks for efficiency. The main difference: Platform Accounting Group deploys first and then acquires the firms that show the strongest improvement. The underlying model is the same.

The same acquisition-plus-technology playbook works beyond knowledge-work categories.

Pipedreams – [covered previously](/review/makdonalds-dlja-uslug) – raised $35.7M to acquire HVAC (Heating, Ventilation, and Air Conditioning) installation and maintenance companies and migrate them onto its digital platform. The US HVAC services market is projected to reach $36 billion by 2030, with roughly 145,000 companies operating in the space in 2023 – the vast majority of them small: 45,000 have 1–4 employees, 22,000 have 5–9, and so on. Pipedreams raised a prior round of $25.5M last spring. The founders noted that round should be the last equity raise, since acquisition costs reliably pay back quickly – which is itself proof the model works.

03 /Opportunities

For a long time, services businesses were hard to acquire at scale. What were you really buying – people who might walk out the door and leave you with nothing?

If technology becomes the core of a services firm – with people handling the "last mile" of client delivery – then the people become the support layer rather than the whole product. A loose analogy: they function more like delivery drivers at DoorDash, whose presence doesn't prevent the company from scaling or appreciating in value.

The underlying economic reality: people spend more on services than on goods. In the average American's spending breakdown, services account for roughly 70% of total consumption, with goods making up the remaining 30%.

In other words, services are a bigger prize than products – and typically carry higher margins too.

The general direction for startup builders here is to create technology-native companies in services markets – where technology isn't a feature bolted on, but the operational core of the business.

More specifically: in many services markets right now, it may actually be less profitable to sell a platform to others than to build the platform for yourself and use it to deliver services directly. The economics of operating the platform often beat the economics of licensing it.

And for accelerating growth, the playbook is available: start acquiring small existing firms in the same market – not for their people, who are a depreciating asset but to plug them into your technology stack and turn them into branches of a scalable operation.