When the Magic Came: How Xpenser’s Web App Turned into Startup Gold

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create a system that can categorize a receipt for “XYZ Web Hosting” as a computer and Internet expense and another for “ABC Host” as a meals and entertainment expense.

“The whole point is to make it automatic, and we do that by applying machine learning to these repetitive, boring tasks,” Darugar says. “We make it really easy.” The system even has the capability of recognizing an overseas business expense that is incurred, for example, in euros, and using currency conversion rates to also show the amount in dollars.

Xpenser eliminates the need to stuff receipts into an envelope or wallet, Darugar says, because the technology satisfies IRS requirements for backup information that is legible, searchable, and tied to a particular event or expense. While Darugar was initially focused on tracking expenses for big companies, he says the company’s core clients now tend to be small and medium businesses with 50 to 2,000 employees.

“We have a lot of real estate agents who use this,” Darugar says. “They love being able to just SMS [text message] their mileage.”

Darugar says the next evolution of the company is focused on tracking time for professional services, and on integrating finance and administrative capabilities that will make it possible for consultants and other professional service providers to bill directly for their services. “It’s a beautiful area for us,” he says.

Today, the San Diego software-as-a-service provider has four employees and about 80,000 customers, although Darugar says those are not all paying clients because he’s been using a freemium business model. He’s financed the company himself, and says Xpenser is not currently looking for investors. “We found a business,” he says. “We found something people are willing to pay for, and it’s been self-funded. So when I take funding, it’s going to really be for the next stage of growth.”

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Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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4 responses to “When the Magic Came: How Xpenser’s Web App Turned into Startup Gold”

  1. Adriana says:

    A great product with a great team! Congrats on the growth Parand.

  2. Roohi says:

    This is an awesome product that I have been using and recommending for few years now. I especially love it around this time of the year when everyone is scrambling to get their taxes done, All I have to do is to go over my chart of accounts, nicely organized in Xpenser, use the data or shoot out a report to my CPA.

    As a business owner I love the ease of use of tracking my expenses, taking a picture and be done with that expense.

    This is a very efficient and intelligent product that I highly recommend.