Fragment, a startup founded by Thomas Neckel and Omi Chowdhury in 2021, is revolutionizing the way engineers handle real-time, double-entry accounting. Designed to simplify complex accounting processes, Fragment's ledger API eliminates the need for engineers to master accounting jargon, allowing them to focus on building software that tracks customer balances seamlessly.
This dynamic duo is no stranger to the startup world, having previously founded and successfully exited two companies: identity management firm Scuid, acquired by CA Technologies in 2014, and private investment platform Cove.io. Their experience with Cove.io highlighted the critical need for an efficient ledger system, inspiring the creation of Fragment.
“In order for anyone to close their books for the month, the balances have to be right and reconciled with the bank statements,” Neckel explained. Traditionally, accountants rely on enterprise resource planning systems for reconciliation. However, Fragment’s API ensures that balances within fintech products stay in sync with bank statements and balance sheets, significantly speeding up the closing process.
Neckel cited reconciliation issues between Evolve Bank and Synapse as an example of the problems Fragment aims to solve. With Fragment, fintech developers can create and embed financial products using an intuitive dashboard. This tool allows them to model fund flows, which are recorded as entries in a database similar to PostgreSQL. This capability enables seamless updates to account balances, streamlining financial operations.
Fragment already boasts an impressive roster of early customers, including TruckSmarter, Nala, and Pleo. TruckSmarter leverages Fragment for its fuel payments network and finance purchases, while Nala uses it to facilitate business payments to Africa. Pleo, a B2B spend management platform, relies on Fragment to manage and track historical balances for its 30,000 customers.
To support its growth, Fragment has secured a $9 million seed round from prominent fintech executives, bringing its total funding to $10.8 million since June 2021. Notable investors include Stripe, BoxGroup, Avid Ventures, and industry leaders from Plaid, Lattice, DoorDash, Uber, Coinbase, Adobe, and Linear. Gradient Ventures participated in the pre-seed round.
Fragment's primary competitor, Modern Treasury, focuses on payment processing. However, Fragment aims to address the broader challenge of value exchange online. “Stripe gave two people in a garage the same payments infrastructure as Amazon,” Neckel said. “Let’s see what’s possible when we give two people in a garage the same financial infrastructure as Square, Stripe, and Uber.”
With fresh funding, Fragment plans to expand its engineering team and enhance its go-to-market strategy. Adam Rothenberg, a partner at BoxGroup, expressed his excitement: “We’re thrilled to see what’s possible when you arm technology companies with programmable versions of the double-entry systems the modern economy runs on.”
Fragment’s innovative approach to accounting for engineers positions it as a game-changer in the fintech landscape, promising to streamline financial operations and empower developers worldwide.
