Afternoon.co

What do they actually do

Afternoon.co runs a managed bookkeeping, tax, and compliance service for founders of startups and e‑commerce businesses. The product combines software and AI with human accountants to keep books up to date, handle sales‑tax obligations, file corporate taxes, and manage state compliance requirements (homepage, YC profile, Launch post).

Customers connect billing/payroll, bank/credit accounts, and sales channels. Afternoon automates transaction categorization and reconciliations, produces monthly financials, monitors sales‑tax nexus, registers where needed, files and remits returns, and handles federal/state corporate tax filings and Delaware franchise tasks. It also maintains a compliance calendar and processes state mail; accountants review and approve filings and handle edge cases. Onboarding is currently demo‑led rather than fully self‑serve (bookkeeping, sales tax, taxes, compliance, homepage).

Who are their target customer(s)

• Early‑stage ecommerce founder selling on own site and marketplaces: Spends hours reconciling multiple channels and worries about missing state registrations or filing deadlines for sales tax, risking penalties.
• Marketplace/FBA seller with multi‑state nexus from inventory or fulfillment: Surprised by new state obligations and burdened by registrations, filings, and back‑and‑forth with state agencies.
• Seed‑stage SaaS founder with subscription billing: Needs consistent, investor‑ready monthly financials and clean books but lacks a finance hire to reconcile billing to deposits.
• Solo founder or tiny team doing manual bookkeeping: Manually categorizes transactions and tracks deadlines; fears errors or penalties due to limited accounting expertise.
• Founder running a multi‑entity or multi‑state startup (e.g., DE C‑corp + out‑of‑state ops): Needs help coordinating corporate tax returns, Delaware franchise requirements, and ongoing state filings without missing annual reports or notices.

How would they acquire their first 10, 50, and 100 customers

• First 10: Use warm intros to YC founders and VC/angel portfolios; run free or discounted white‑glove pilots to connect accounts, deliver books and filings, and capture case studies for sales (homepage – demo, YC profile).
• First 50: Target ecommerce and FBA communities with outbound and practical webinars on sales‑tax risk/bookkeeping, and sign referral partnerships with Shopify/ecommerce agencies and independent CPAs to feed managed onboarding (sales tax, bookkeeping).
• First 100: Launch clearer pricing and light self‑serve onboarding for standard plans, add a small sales/CS team to close and retain, and scale partner channels using early customer case studies to drive inbound (compliance/product direction, pre‑seed blog).

What is the rough total addressable market

Top-down context:

U.S. ecommerce sellers number in the millions across Shopify and Amazon, and there are ~6.27M employer small businesses overall; managed bookkeeping + tax services typically price in the low‑to‑mid hundreds per month (Shopify stores, Amazon sellers, SBA, Bench pricing).

Bottom-up calculation:

TAM = number of target customers × ARPU. Using a focused 1M high‑complexity founders estimate and $4.1k–$7.2k annual ARPU (Bench pricing proxy), TAM is ~$4–$7B; using ~3.5M broader ecommerce sellers, TAM is ~$14–$25B (Bench pricing, Shopify stores, Amazon sellers).

Assumptions:

• Significant overlap between Shopify and Amazon sellers; unique seller count is below the simple sum.
• ARPU proxy based on Bench’s public bookkeeping and bookkeeping+tax plans; Afternoon’s pricing may differ.
• Core near‑term focus is higher‑complexity founders (multi‑state sales tax, filings), not all SMBs.

Who are some of their notable competitors

• Bench: Managed bookkeeping with optional tax filing for small businesses; public pricing is a useful proxy for ARPU in this category (pricing).
• Pilot: Bookkeeping, tax, and CFO services focused on startups; a common incumbent for venture‑backed companies (pricing).
• Avalara: Sales tax automation and compliance software (registrations, filings, remittance) used by ecommerce sellers at scale—often paired with separate bookkeeping providers.
• TaxJar: Ecommerce sales tax calculation, reporting, and filing automation; an alternative for sales‑tax workflows alongside other bookkeeping solutions.
• Collective: All‑in‑one back‑office (bookkeeping, taxes, compliance) aimed at solopreneurs/S‑Corps; overlaps on managed books and tax filing for very small businesses.