Auditor AI startup MindBridge wins global deal with KPMG

Accounting giant KPMG International Ltd. will incorporate software from fast-growing Ottawa AI company MindBridge Analytics Inc. into its workflows to bring the power of artificial intelligence to financial audits around the world.

The professional services giant has struck a global deal with MindBridge. MindBridge’s AI software automatically reviews all assigned accounting entries by auditors and flags fraudulent or suspicious entries for investigation. By comparison, a human auditor only looks at a fraction of the entries and may miss mistakes or misconduct.

MindBridge’s AI will “become part of KPMG’s methodology” and will be incorporated into its digital audit platform used in 143 countries, Kristy Carscallen, KPMG’s head of audit and Canadian managing partner, said in an interview. I’m here. “It becomes how we do our audits. MindBridge ticked a lot of boxes when we considered our goal of providing high-quality audits.”

Kevin Kolliniatis, National Technology Lead for Audit and Assurance at KPMG Canada, describes traditional audits as “like trying to find a needle in a haystack using sampling techniques. I’m identifying some of those needles.”

The deal is a major win for eight-year-old MindBridge, which began working with KPMG Canada several years ago and used that information to expand its software’s capabilities. John Stokes, Managing Director of Investor Real Ventures and his Partner at MindBridge, said:

It also marks MindBridge back on track to fulfilling its early potential as one of Canada’s most promising AI companies. Two years later, the veteran software sales executive was replaced by Leyton Perris as Chief Executive Officer and has focused on aggressive sales pursuits.

Its business has grown more than 6x in the last two years and will exceed $20 million in revenue by 2022. MindBridge has added dozens of corporate customers.

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MindBridge, which has not raised funding since 2019, is also in “active negotiations” to raise new funding, Perris said in an interview. “If you’re growing as fast as we are, it makes sense financially,” he says, seeking funding. “We are debt free and our growth story is solid.”

The company was founded in 2015 by Ottawa-based entrepreneur Solon Angel. He believed AI could help auditors detect fraud and other accounting anomalies. Angel was inundated with calls from companies wanting to see his software. It was still just a concept, so he turned to veteran Ottawa tech entrepreneur Eli Fathi for help.

Fathi was touched by the opportunity and convinced that MindBridge could become a giant. He joined as his CEO and hired experienced leaders, including Robin Grosset, former chief of IBM’s Watson Analytics Group, his architect and chief technology officer (Angel is currently Chief Impact Officer). By 2017, the company had 20 audit clients and partners in Canada, the US and the UK.

The timing was good. Canada was attracting huge amounts of foreign investment in startups and research institutes, lured by its reputation as an AI hub. MindBridge raised $42.3 million from 2017-2019 with investor money and government funding.

However, MindBridge is not focused on understanding which part of the market to pursue (internal auditors, external auditors, corporate or government), and cautious clients are often hesitant to adopt new technologies. was doing.

MindBridge has also experienced turnover, including the swift departure of two high-profile executives hired to top posts in 2019. COVID-19 hit his bottom line in 2020, prompting him to cut jobs by 10% in April.

Since Perris took over from current Chairman Fathi, the company’s fortunes have been on the rise. “We’ve focused on rapid commercialization, trading less from movement and more from results,” Perris told The Globe and Mail last June.

Grosset says: We know who our buyers are and we know how our products work. that helped us. ”

MindBridge also didn’t add jobs before the tech recession that started in late 2021, as many tech companies did. Perris said the 130-employee company is “in a sound commercial position with a sustainable business and positive cash flow.”