UK-based Startup Ember Raises £5m and Partners with HSBC for Digital Tax Services
A UK-based accounting startup, Ember, has successfully secured £5m in funding and has established a partnership with HSBC to offer digital tax services to the bank's SME customers. Founded in 2018 by ex-Deloitte executive Dan Hogan and software engineer Aaron Shaw, Ember aims to simplify financial management for SMEs by providing integrated tax and accounting tools on HSBC's banking platform. This partnership is in response to the UK government's Making Tax Digital initiative, which requires businesses to file additional tax returns digitally by 2026. Ember has pivoted from direct customer services to embedded finance and has received investments from Valar Ventures, Viola Fintech, and Shapers, bringing its total funding to around £10m.
Key Takeaways
- UK-based accounting startup, Ember, secures £5m funding and partners with HSBC for digital tax services
- Ember aims to integrate tax and accounting tools into HSBC's banking platform to simplify financial management for SMEs
- HSBC's SME customers will have access to invoicing, transaction categorization, and cash flow tracking
- Ember shifts from direct customer services to embedded finance, with plans to sell its embedded offering to other banks
- Partnership addresses the UK government's Making Tax Digital initiative, requiring additional tax returns for 1.75m businesses by 2026
Analysis
The funding and partnership of Ember with HSBC illustrate the growing trend of embedded finance, benefiting both companies and SMEs. This development directly addresses the UK government's Making Tax Digital initiative, easing the compliance burden for 1.75m businesses. The investment in Ember by Valar Ventures, Viola Fintech, and Shapers signifies their confidence in the UK's financial technology sector and may prompt other banks to adopt similar digital tax services. However, challenges lie ahead as Ember must ensure seamless integration with HSBC's platform and maintain robust data security. Ultimately, Ember's success could drive innovation and investment in the accounting and embedded finance sectors, sparking healthy competition.
Did You Know?
- Embedded Finance: Refers to the integration of financial services into non-financial platforms or businesses, as Ember is integrating its tax and accounting tools into HSBC's banking platform.
- Making Tax Digital (MTD): A UK government initiative aimed at digitizing the tax system and affecting around 1.75m businesses in the UK, with Ember's partnership with HSBC addressing this initiative by providing digital tax services.
- Valar Ventures, Viola Fintech, and Shapers: These are venture capital firms that have invested in Ember, indicating confidence in Ember's business model and potential for growth.