FlowFi, a startup creating a marketplace of financial experts for entrepreneurs, has closed on $9 million in seed funding.
Blumberg Capital led the investment, with participation from a group of investors including Parade Ventures, Differential Ventures, Precursor Ventures, Special Ventures, 14 Peaks Capital, and Cooley LLP.
Nate Kavanaugh and co-founder JJ List launched the company in 2021 to automate accounting functions for founders. Prior to that, Mr. Cavanaugh founded his Brainbase. Brainbase was then acquired by Constellation Software in 2022. Investor List was Cavanaugh's first company to join his Brainbase.
Accessing key accounting metrics in an understandable way was something Cavanaugh himself struggled with as a founder.
“I was preparing for a board meeting and trying to prepare financial materials for investors, but being a founder with no financial experience and trying to understand what was going on in the company in real time, It was really frustrating,” Kavanaugh told TechCrunch. .
FlowFi chat function. Image credits: flow fi
He then contacted List about the idea. List also said accounting support is something that many of the companies in his portfolio consistently request. But the available solutions “didn't necessarily align with what entrepreneurs typically want,” he said. List liked his Cavanaugh solution so much that he joined FlowFi.
FlowFi combines technology with financial experts, including chief financial officers, accountants, and tax professionals from companies such as PayPal, Netflix, Headspace, and UNREAL Brands. Additionally, it goes beyond traditional bookkeeping to show founders important non-GAAP financial metrics, such as monthly and annual recurring revenue, gross profit trends, and vendor spending trends.
Almost three years later, the company has more than 100 customers and generates millions of dollars in annual recurring revenue, Kavanaugh said. FlowFi also enables financial professionals to build independent businesses.
Accounting software can be a little boring, but as more startups emerge, it's a field that venture capitalists love right now. Recently, we've seen Pennylane become a unicorn while companies like Finally and Indy announced new funding.
FlowFi plans to continue developing its technology with new funding in research and development to help customers integrate their accounting systems with FlowFi. It also creates more ways for founders to understand key performance indicators and collaborate with financial professionals.
The other is building artificial intelligence-powered tools that automate functions that accountants do all the time, such as classifying transactions. Additionally, the company plans to invest in sales and marketing.
“We feel like we have a good grasp of what's going to happen because we're also our own customers,” List said in an interview.