UK tech start-up vows to ‘do to Sage what Netflix did to Blockbuster’
When Netflix began quietly mailing DVDs to American homes in 1998, Blockbuster barely flinched.
By the time it did, the game had changed. And, with its business model firmly based on late fees and physical stores, it was too late.
Fast forward a quarter of a century, and UK tech company iplicit is hoping to orchestrate a similar upset in the accounting software market.
“We want to do to Sage what Netflix did to Blockbuster”, Lyndon Stickley, chief executive of iplicit, told CityAM.
It’s a bold statement for the cloud first, AI-fuelled challenger, and one that, given how entrenched Sage and its global rivals are, borders on bravado.
Still, some in the sector are taking note.
A shift is underway
Accounting software rarely makes headlines.
But, beneath the radar, the market is undergoing a structural shift as cloud-native platforms powered by AI begin to bite into businesses built on slower moving, legacy systems.
Founded in 2019, iplicit has planted its flag firmly in the mid market, targeting organisations that have outgrown entry level tools like Xero, yet can’t justify the cost or complexity of complex heavyweight platforms like Oracle NetSuite.
Stickley sees this space as ripe for disruption. “It’s a £2bn a year opportunity”, he claimed.
With expansion plans brewing across the Atlantic and £25m in fresh funding, ipilicit believes it is well placed to seize it.
The company is preparing to release an AI-enabled reporting and analytics suite later this year, and will showcase new AI-powered support tools in May.
“We’ll be using our latest investment to double down on AI – not just in aspects of the product, but also to assist the way we operate as an organisation internally”, Stickley said.
But, it’s not the only one with a cloud-first mission.
A threat to the old guard
Sage, the Newcastle-based FTSE 100 titan long seen as the default choice for finance teams, isn’t taking any of this lying down.
Once heavily reliant on on-premise systems, it is pivoting rapidly to cloud technology and embedding AI across its tools.
Just last month, the business accounting vendor rolled out a new AI assistant to help small business accountants.
Chief technology officer Aaron Harris said the goal was to “leverage our global expertise”, ensuring Sage’s AI works “at a very capable level in every part of the world Sage operates.”
The firm’s latest results show the approach may be paying off, too.
It posted a 21 per cent surge in annual profits to £529m and a launched £400m share buyback in November. Shares are trading near all-time highs.
Meanwhile, Xero – the New Zealand darling of small businesses – is also pushing harder into the UK market, after posting a 76 per cent jump in interim profits.
Goldman Sachs analysts recently flagged the UK as a “key growth market”, citing recent consolidation as an opening for Xero to scale even further.
Shares jumped six per cent in the back of the update.
Then there’s Oracle NetSuite, which continues to dominate the large-enterprise space, but has begun edging into the mid-market too – exactly where iplicit is targeting.
Implementation, or imitation?
While older, legacy systems often come with costly, drawn-out onboarding, Stickley claims iplicit reduces this friction.
The company developed a modern, browser-based tool that strips out many of these inefficiencies.
In 2019, Stickley brought it to the market by combining iplicit’s new tech with members of the Exchequer team – creators of a legacy product with a loyal user base.
“Our implementation is typically 20 days”, he said, “whereas for alternative systems, it can often run over 100 days.”
The company has leaned heavily into automation, enabling users to generate reports, and streamline audits with fewer human hours.
Clients appear to be responding. One customer, children’s hospice charity Martin House, called the switch from legacy systems “game changing”.
Still, turning loyal users away from incumbents like Sage is far from an easy feat.
Many have relied on the platform for decades, and full migrations remain both costly and risky.
And, Sage has responded in kind, streamlining its onboarding processes and investing in support to keep customers in the fold.
Funding the fight
In January 2025, iplicit closed its first external instituional round, a £25m investment led by growth equity firm One Peak.
The funding will support domestic growth and lay groundwork for international expansion, including a planned US entry in 2026.
For now, though, Stickley is keeping the focus closer to home. “We want to dominate the UK and Ireland first”, he said.
There is no immediate exit strategy either. “We believe this could be worth £5bn”, he added.
That valuation may be ambitious, but iplicit’s growth to date is striking.
But, leading competitors like Sage, Xero, and Oracle remain from anaemic.
An industry in flux
The global accounting software market is forecast to hit $38.27bn globally by 2032, according to recent industry estimates.
Loud calls for better usability, lower pricing and cloud-native functionality are reshaping buyer expectations – and perhaps opening the door for agile challengers like iplicit.
In the early 2000s, Blockbuster was slow to recognise the shift towards streaming, an oversight which ultimately cost it its position as market leader.
Whether the same fate awaits the old guard of enterprise software remains to be seen.
But, as AI integration, investor capital and user expectations reshape the terrain, iplicit is betting that history may be ready to repeat itself.