FreeAgent Bags Barclays Bank.

One of the many SaaS Accounting vendors I keep an eye on is FreeAgent – a company I’ve written about many times in the past. FreeAgent are a UK based vendor that are, quite rightly, focusing on their home market rather than getting all starry eyed about opportunities over the Atlantic. That focus seems to be paying off in spades for FreeAgent who are this morning announcing that they have been chosen to be the bookkeeping component for MyBusinessWorks, a business support package being rolled out by Barclay’s Bank, one of the UK’s largest banking groups.

MyBusinessWorks is set up as a one-stop-shop for SMB software tools. In addition to FreeAgent for accounting, it offers;

All these tools are packaged together and obtained directly from the bank – easing the billing and provisioning hurdles for SMBs. The deal includes single sign on support and automatic provisioning (via SAML). All billing goes through Barclays

This is a fantastic route to market for FreeAgent, I’ve always been a little concerned about SaaS accounting vendors relying primarily on accounting practices as their route to market – accountants (and this is a gross generalization) tend to lack the agility, flexibility and innovativeness to really deliver a sufficient number of customers for a SaaS accounting vendors – especially so given the fact that if a SaaS accounting product does (as many of us contend) save practitioners time and money, then that might in fact lead to reduced revenue for said practitioner. A topic discussed on Adrian Pearson’s post.

ANyway, back to this deal. FreeAgent CEO Ed Molyneux didn’t divulge pricing for the deal but did say that;

Margins are lower than direct customers, as you’d expect, but the rapidly increasing surface area of FreeAgent customers makes word-of-mouth even more powerful and allows us to build in some really interesting network effects.

This is a great win for FreeAgent, but also a great “Cloud goes mainstream” story too. This deal should see FreeAgent gain a real toehold in the UK market which, in turn will help some of the other players gain a bigger toehold in the marketplace. Molyneux did tell me something very interesting in that with the soft-launch of this product into Barclay’s branches;

we’re now growing several times faster than Kashflow, Xero etc.

That’s a pretty bold statement and one that is even more interesting given the combined facts of Xero’s high level of capitalization and the recent news that Kashflow has pulled the pin on fundraising efforts for now.