Firmbase raises $12M to modernize financial planning for startups
Firmbase, a startup that offers a modern financial planning and analysis platform for startups, has raised a $12 million seed round led by S Capital, with Meron Capital and numerous angel investors also participating in the round.
Financial planning probably isn't top of mind when you think of startups, but with the tech industry's new-found focus on financial restraint, being able to create budgets, run financial forecasts and analyze business data is now more important than ever.
"We identified a significant need for a modern platform that enables you to do continuous planning rather than one-offs," Firmbase co-founder and CEO Tomer Federman told me. "[With Firmbase], the process is connected to your data sources, rather than static spreadsheets."
Before co-founding Firmbase, Federman worked at Facebook (when it was still called Facebook) on brand and video advertising, as well as its audience network. He also previously co-founded Everblend, an early coffee subscription startup, and studied finance in college. Like so many Israeli founders, Federman met his co-founder and CTO Vlad Shumlin during their time in the Israel Defense Forces, where Shumlin focused on cybersecurity.
Federman noted that during his time at Facebook, he realized that building a budget and financial forecasts needs to involve stakeholders beyond the financial planning and analysis (FP&A) teams. "VPs of R&D, for example, are really important stakeholders, because who knows how many engineers they're going to hire. The director of marketing, the head of sales -- you need to have them engaged in the process so that you'll actually be able to build more accurate forecasts and budgets," Federman explained.
Today, a lot of the data to build these models sits in silos and pulling it all together is a lot of routine work that takes up a lot of time. Once that's done, the data goes into a spreadsheet and simply keeping that updated as headcounts change, for example, takes up a lot of time. The promise of a product like Firmbase is that it can aggregate all of this data and automatically update existing models.
"A lot of the magic that happens on our platform, if you will, is through the very flexible and dynamic modeling engine that we've built, which then helps you do things like scenario planning and comparing different outcomes and things like that," said Federman.
Firmbase integrates with a lot of the standard financial and HR tools, including ADP, NetSuite, Rippling, Salesforce and Workday -- as well as, of course, Excel.
The team decided to focus on tech companies first, though it plans to expand beyond them in the future. For the most part, that's because the company wants to focus and a big pharma customer would have very different needs from a tech company, but Federman also noted that for tech companies, which tend to move quickly, the utility of a service like Firmbase isn't so much the plan but the planning. "Plans become obsolete for tech companies within 30 days, right? Things always change and so I think they really appreciate the data-driven approach and the flexibility that our platform provides, because with the click of a few buttons, you can change things and see how they impact your plans. We've seen really good product market fit there," he said.
Unsurprisingly, Firmbase has also started building some machine learning features into its product. Given that this technology excels at quickly summarizing historical data and providing forecasts based on it, that's not a major surprise. The company is currently beta testing these features with a small set of customers.