FlowFi, a startup creating a marketplace of finance experts for entrepreneurs, closed on $9 million in seed funding.
Blumberg Capital led the investment and was joined by a group of investors including Parade Ventures, Differential Ventures, Precursor Ventures, Special Ventures, 14 Peaks Capital and Cooley LLP.
Nate Cavanaugh and co-founder J.J. List launched the company in 2021 to automate accounting functions for founders. Prior to that, Cavanaugh founded Brainbase, which was later acquired by Constellation Software in 2022. List, an investor, was Cavanaugh’s first check into Brainbase.
Access to important accounting metrics, in an understandable way, was something Cavanaugh himself was having difficulties with as a founder.
“I was trying to prepare for board meetings and prepare financials for our investors, and just really frustrated with being a founder without a finance background and trying to get a pulse on what was going on in the company in real time,” Cavanaugh told TechCrunch.
FlowFi's chat function. Image Credits: FlowFi
He then reached out to List about the idea. List also said accounting assistance was something many of the companies in his portfolio consistently requested. However, the available solutions “didn't necessarily fit what entrepreneurs typically wanted,” he said. List liked Cavanaugh’s solution so much, he joined him at FlowFi.
FlowFi combines technology with financial experts, including chief financial officers, accountants and tax experts from such companies like PayPal, Netflix, Headspace and UNREAL Brands. It then goes beyond traditional bookkeeping to show founders essential non-GAAP financial metrics, such as monthly and annual recurring revenue, gross margin trends and vendor expenditure trends.
Nearly three years later, the company has more than 100 customers and is generating millions in annual recurring revenue, Cavanaugh said. FlowFi also enables finance professionals to build independent businesses.
Accounting software might be a bit boring, but as more startups come to fruition, it’s an area venture capitalists are loving right now. We saw companies like Finally and Indy recently announce new funding, while Pennylane became a unicorn.
FlowFi intends to deploy the new capital into R&D to continue technology development so that customers can integrate their accounting systems into FlowFi. It is also creating more ways for founders to understand their key performance indicators and work with the financial experts.
The other side is to build artificial intelligence-powered tools to automate functions accountants constantly do, like categorizing transactions. In addition, the company plans to invest in sales and marketing.
“We’re our own customer as well, so we feel we have a good handle on what’s coming around the corner,” List said in an interview.