The hi-tech threat
Web accountant Ascot Drummond - which claims to be the UK's first online accountancy business - has received £6.25m in venture capital from private equity capitalist Mercury Private Equity.
The firm, which provides a full range of services, has been targeting the SME sector since its launch in April 1999 and is seen as an increasingly strong rival to the traditional high street accountants.
Ascot Drummond is part of a growing online threat to the traditional accountant. Other online operations include the Desktop Accountant.
Ascot Drummond believes it has a market potential in the region of 3.2 million SMEs with five employees or less in the UK including franchise operations and independent consultants.
Humphrey Drummond, chief executive of Ascot Drummond, said he was confident his firm would challenge traditional accountancy firms and said he believed his firm had disproved the theory online ventures were unable to attract backing, but admitted it was becoming harder.
He added: ‘This is an exciting development for us, particularly in light of the fact it is becoming increasingly hard for dot.com companies to secure investment. However we believe Mercury has done its homework extensively and has subsequently backed our business plan.
‘In the accountancy sector, companies tend to be slow adopters of new technology, but I’m confident that the internet has created an opportunity for us to deliver a more convenient, accessible and transparent accountancy service for the SME market.’
The capital was secured following ‘considerable’ discussions with Mercury and the funds are expected to be invested in a new operations division to be developed in Dundee and an IT recruitment drive.
Further improvements such as an overhaul to its website and mechanisms to speed up its service are also planned.
‘We are looking to expand the capacity of the business and both improve and expand the services we can offer. We have made the IT contractors sector our main area of business and we are looking to grow in that area, but we will also be looking to grow in other sectors as well’, added Drummond.