Accel backs Indian American-led startup Nanonets which uses AI to kill finance paperwork

Nanonets, led by CEO Sarthak Jain, which uses artificial intelligence to help businesses square accounts and manage budgets, raised $29 million in an early round led by Accel.

Y Combinator, Elevation Capital and others took part in the Series B round, which brings the San Francisco-based startup’s total funding to $40 million, it said in a statement Tuesday.

Nanonets’ AI software handles back-office tasks such as invoice processing, doing away with chores including the manual entering of data, and checking and verifying it against purchase orders and matching it with budgets. Each invoice on average takes 12 minutes for an employee to process, the startup estimates, and says its product can reduce that to one minute.

“The internet was going to kill paper, but businesses today are producing more documents than ever,” Chief Executive Officer Sarthak Jain said. “Millions of highly-skilled professionals are stuck looking for needles in haystacks.”

Jain and fellow machine learning engineer Prathamesh Juvatkar, both 33, founded Nanonets as part of Y Combinator’s 2017 cohort. The startup harnesses technologies including computer vision, a field of AI that helps with extracting meaningful data from a variety of digital images or other visual inputs, and transformer models, which track relationships in sequential data.

Nanonets uses a combination of AI models and tools to automate different work processes, cutting out the most repetitive and mundane office work.

So-called intelligent document processing was a $1.4 billion market in 2022, and it’s set to grow at an annual rate of about 25% until 2032, according to an estimate by researcher Global Market Insights. The term describes the processing of data in documents from emails to PDFs to charts.

Nanonets derives four-fifths of its revenue from customers in the US and Europe, helping them handle documents in finance, accounting, operations or other areas, Juvatkar said on a video call. Most of its revenue comes from automating processes such as accounts payable and reconciliation. The company’s user base has grown four-fold in the past 12 months, said Juvatkar, also its chief technology officer.