San Francisco-based AI accounting startup Numeric has scored a substantial $28 million Series A funding round. Led by Menlo Ventures with participation from new investors IVP and Socii, alongside continued support from existing backers Founders Fund, Long Journey, 8VC, Friends & Family Capital, and Fifth Down.
Founded in 2020 by Parker Gilbert (CEO), Anthony Alvernaz (CPO), Andrew Bihl (CTO), Numeric comes as a fix for error-prone, and time-consuming nature of financial record keeping.
Numeric’s innovative accounting software automates key aspects of the book-closing process, transforming financial close management. The integration of generative AI significantly enhanced Numeric’s capabilities, catapulting it to industry leader status. Today, Numeric is utilised by top accounting departments, including Brex, OpenAI, Plaid, and Wealthfront, streamlining financial close processes and alleviating historic pain points.
Numeric has experienced remarkable growth, with revenue surging fourfold to reach single-digit millions over the past year. This impressive trajectory has attracted significant investor attention – allowing the company to raise its $10 million seed round five months back from Founders Fund, Long Journey, Menlo Ventures, 8VC, Friends & Family Capital, Fifth Down among others.
In a conversation with TechCrunch, Parker Gilbert shared that Numeric streamlines the monthly book-closing process for accounting teams, slashing days off their workload. The company’s innovative solution aggregates and reconciles data from diverse accounting systems and Excel spreadsheets. Leveraging AI technology, Numeric’s product identifies month-over-month changes in line items, flagging outliers and unexpected variations. The AI agent then provides explanatory insights, eliminating the need for time-consuming Flux Analysis – the process of documenting account variances. By automating this tedious task, Numeric significantly reduces the documentation burden, freeing accountants to focus on higher-value tasks.
Gilbert showcased the startup’s AI-powered flux analysis with a concrete example. When the AI agent detects a notable increase in legal expenses, such as from September to October, it generates a clear explanation. For instance: “Your legal expenses went up this month because you paid Wilson Sonsini $X amount more for your funding.”
Gilbert acknowledged a potential concern regarding AI-generated commentary – the risk of inaccuracies. However, he emphasized that Numeric’s design mitigates this issue. By providing direct links to supporting documentation, accountants can effortlessly verify the AI agent’s findings at any time, ensuring the accuracy and reliability of the automated flux analysis process.
Currently, Numeric’s generative AI does not perform actual tie-outs and calculations. However, CEO Parker Gilbert anticipates that the company’s model will soon possess the capability to accurately execute these tasks.
“In terms of synthesising large quantities of data, LLMs are incredibly good at this today, and I think are going to only increasingly get better,” Gilbert noted in his conversation with TechCrunch
Menlo Ventures partner’s Croom Beatty had been searching for a company revolutionising accounting software when he discovered Numeric. The startup caught his attention, standing out in a category with significant potential.
“Numeric’s moat is a lot deeper than a lot of areas we were looking at,” he said. “It marries complex workflow with complex data in a market that has not been well served by tech companies.”
Beatty sees Numeric expanding its offerings, potentially entering financial planning and analysis, a space currently led by Anaplan, to fuel future growth.
Numeric operates in a competitive accounting software landscape, vying with established players BlackLine, a publicly traded company, and FloQast, an 11-year-old startup that recently secured a $1.6 billion valuation with its Series E funding in April. According to Croom Beatty, the scarcity of new AI-powered entrants in this market stems from the intricate nature of Numeric’s technology, making it challenging to replicate.
