No accountant likes the month-end-close, and while many attempts have been made to address this pain point, no one is helping you close faster and more reliably than FloQast. FloQast, the SaaS providers made for accountants and finance teams, offers one platform to track, reconcile and automate some of the most tedious tasks while allowing you to easily collaborate with your team. The software works with all of your existing programs such as your ERP and Excel so that your month-to-month routine of closing the books can be smoother than ever before.
LA TechWatch spoke with CEO and cofounder Michael Whitmire about the Startup and their newest round of funding.
Who were your investors and how much did you raise?
This was our Series B round, led by Insight Venture Partners with continued participation from Toba Capital, who led the Seed round and Polaris Partners, who led the Series A round. We raised $25M this round raising our grand total funding amount to $33M.
Tell us about your product or service.
FloQast offers close management software, built by accountants for accountants to close the books faster and more accurately. FloQast combines Business Process Management (BPM), reporting and collaboration into a single, intuitive solution that allows accounting departments to work together to quickly, efficiently and accurately close their books. By directly integrating with both an organization’s document storage (Box, Google Drive, Microsoft OneDrive and others) and financial applications (NetSuite, Intacct, Oracle, SAP and others), FloQast lets accountants continue to work in Excel while keeping sensitive financial data secure in their own systems. This unique approach enables security, control and flexibility. FloQast has patents pending on its distinctive and innovative Excel integration.
Close management software in increasingly gaining mindshare within accounting departments as a key way to improve the overall close process. From accountants to CFOs, there are myriad reasons to adopt close management software:
- CFO/VP of Finance – Needs to get financials faster at the end of each month to start reporting, wants to reduce overall operational and audit costs. The chief financial officer cares about getting the financials closed faster at the end of each month in order to start reporting. Close management software helps achieve both of these.
- Controller – The controller wants their closing process to go faster and always be accurate. Close management software helps improve team alignment and institutionalize a company’s end-of-month close process.
- Accountant – An accountant welcomes close management software to automate the highly manual process of closing the books. More importantly, the software helps speed the overall close process, helping avoid late nights at the office during close time and reducing the resources that otherwise would be dedicating most of their time to the close.
What inspired you to start the company?
The month-end close was a very personal problem for me. I was an accountant at public company and had also worked at a Big 4 audit firm prior. There always seemed to be frustration surrounding the close process, namely because of tedious tasks, errors and missed deadlines. I knew there had to be a better way to do it faster, more accurately and more easily through software designed by accountants for accountants. That is when I started figuring out ways I could develop and bring something like FloQast to market.
How is it different?
There is no other provider of close management software that lets accountants work in the way they are accustomed to, using tools they are accustomed to, such as Excel. FloQast’s software was built to work the way accountants work, making it distinctive and different.
What market you are targeting and how big is it?
We target corporate accountants at companies with 200-5,000 employees, which present a $2B market opportunity. Our clients have anywhere from 5-100 team members in their accounting department.
What’s your business model?
We’re a SaaS company and like to say we put the Software AND Service in SaaS. Our software is easy to use, intuitive and can be set up in under two weeks. Our services team is comprised of CPA’s who have first-hand experience with our clients’ pain points. For our clients, having a trusted advisor every step of the way provides incredible value.
What was the turning point when you knew you had to build FloQast?
I was a Senior Accountant in the middle of a department-wide status update meeting with 20 other team members. We were always late and wasting time in these daily meetings, which weren’t helping us hit deadlines. I mentally snapped and thought “why do we all have to sit here and waste our time just so our boss understands we’re late? Can’t we just get back to our desks and close the books? Why isn’t there some dashboard my boss can just check out to get this info?” Pain points around collaboration and transparency was the jump-off point for FloQast. Since then we’ve gone on to help with several other pain points accountants face in the month-end close process.
What was the funding process like?
We began to receive significant inbound interest from the investment community in Q4 2016. We were in a fortunate position to be selective and in March 2017 I began taking informal meetings with top-tier VC funds. The process was fairly informal and accelerated faster than I could have ever imagined. Within one month, we had several term sheets and decided to work with Insight Venture Partners (IVP). The round formally closed about six weeks later.
What are the biggest challenges that you faced while raising capital?
Fortunately, we had a high-class problem in deciding which partner we wanted to work with. In raising our Series B, we focused on VC’s with SaaS scaling experience, deep pockets and a FloQast culture fit. All three were a requirement, and I’m thrilled that we ended up with the perfect partner in IVP.
What factors about your business led your investors to write the check?
We have quite a few things going for us, but first and foremost is our customer satisfaction. We have the highest customer satisfaction rating in our space by a significant margin. As part of the due diligence process, IVP ran a satisfaction survey, and FloQast came back with the highest score of any company they have ever evaluated. Investors recognize that, as former accountants, our team truly understands how the industry and accountants function, and that’s why we’ve been able to build software that resonates so much with our clients.
What are the milestones you plan to achieve in the next six months?
We would like to enhance our product offering, expand globally and build staff to fill newly created, need positions.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
If you’re looking to raise money and have a great business, then it’s all about persistence and approach. This is my first venture and raising our Seed and Series A rounds were very different from the Series B. There was no inbound interest in those rounds, and I had to grind my way to introductions to over 100 VC’s. I really wish I had a different mindset heading into the Seed and Series A processes. My thinking was “I hope I can raise some money”, which the investors can feel and interpret as a lack of confidence in the opportunity. The reality was that we had a great business, traction, domain expertise, amazing customers and a huge market opportunity. My mindset should have been, “Let’s go find the right partner and grow this thing!” I believe the confidence that comes with that slight mentality shift would have made the Seed and Series A much easier for us. But, we are here now, and the path to get was a great experience.
Where do you see the company going now over the near term?
The funds will be used to accelerate product innovation, expand into overseas markets and scaling of the Company’s go-to-market capabilities.
Do you think LA will land the Olympics in 2024?
I really hope not. Traffic is already bad enough, we have more than enough tourists and previous host cities haven’t benefited enough economically to justify the investment required. We have much better things to spend our taxpayer dollars on. Hard pass from me.