Neo.Tax

Apr 8, 2024

Thomson Reuters Ventures backs audit AI company Fieldguide Apr 8, 2024 • Edison Fu The media conglomerate’s evergreen CVC arm has taken part in the AI-driven audit company’s $30m series B round as part of its broader investment focus on artificial technology. Thomson Reuters Ventures recently invested in Fieldguide, an AI-based technology company specialising in the advisory and audit industry, Tamara Steffens, managing director of corporate venture capital unit Thomson Reuters Ventures, told Global Corporate Venturing in an exclusive. “Fieldguide’s technology can be applied to the corporate audit process,” says Steffens. The Canadian media conglomerate is best known for its news and media services, but it also runs legal, tax and accounting, and government businesses. The investment is part of Thomson Reuters’s push into artificial intelligence. It recently set aside $8bn for artificial intelligence-related strategic investments, mergers and acquisitions, and internal staff training. The strategic investments are carried out through Thomson Reuters Ventures, which was launched in 2021 and invests off the parent firm’s balance sheet. Founded in 2020, Fieldguide has developed an AI platform for audit and advisory services. Certified public accountant (CPA) firms including CBIZ, Wipfli, Mazars and Aprio are using Fieldguide’s service. Fieldguide has raised $50m in total funding, and Thomson Reuters Ventures was part of the latest $30m series B round disclosed in March this year. It was led by Bessemer Venture Partners and included 8VC and other unnamed AI investors. The company will use the series B funding to develop more AI-driven tools, expand its market presence and hire more team members. “The timing couldn’t be more perfect as the advisory and audit sector is experiencing a growing talent shortage and needs AI-powered technology solutions to bridge the talent gap,” says Jin Chang, chief executive of Fieldguide. Adapting an AI mindset Steffens joined the CVC unit in 2022 . It has seven team members and 16 active portfolio companies. Thomson Reuters allocates $100m to the CVC initiative. It makes between seven and 10 investments per year, providing between $3m and $7m typically at the series A stage. “At the pace right now we’re renewing the capital every three years, so we’ll refresh in early 2025,” says Steffens, who was part of the GCV Emerging Leaders roster this year . The CVC unit focuses on tax, legal, risk and fraud technologies that can support Thomson Reuters’s global sales force and customers. Some portfolio companies go on to work closely with the corporate’s different business units. Tax and accounting was the fastest growing area for Thomson Reuters in the third quarter of 2023, resulting in investments in companies such as AI-driven bookkeeping automation platform Truewind. Although Thomson Reuters Ventures invests strategically, it tries to avoid backing companies developing competitive technology. If that happens, the CVC team will help facilitate a co-opetition relationship, says Steffens. “We will work with them and partner with them. But we do try not to invest in overlapping tech.” Strategic partnerships with portfolio companies While Thomson Reuters does not envision acquiring more than 10% of the CVC arm’s portfolio companies, the firm may occasionally adapt their technologies internally. For example, Thomson Reuters Ventures late last year invested in AI-based research and development expenses’ tax process platform Neo.Tax. Its technology was integrated with Thomson Reuters’s OneSource Income Tax tool that helps users complete tax returns. “Neo.Tax has a model and an engine that can run in a corporate environment and look at how much time engineers, product team and others are spending on R&D,” explains Steffens. “By tying it into Jira, GitHub and other engineering systems, you can get an accurate measurement of what your team is spending on R&D, which is a tax credit, particularly in the US market.” Steffens says Latin America is an interesting market for Thomson Reuters, and she hopes her team will be able to invest in that region soon. Edison Fu