Today, FloQast, an LA-based startup, announced that it had concluded an investment of $40 million in Series C that Norwest Venture Partners led. During an interview, the company also informed TechCrunch that it had raised an additional $20 million in the inside round between the investment today and its 2017 Series B. With today’s investment, the company has raised around 90 million dollars.
The smaller inside round, however, was not completed because the company had a shortage of alternatives. Ultimately, FloQast chose it over more substantial term sheets and utilized the money to develop an innovative product. The company also raised the round, which we’ll discuss today, at an increased valuation. What exactly did FloQast launch, and how did that decision affect its business? Let’s discuss the products FloQast sells to assist us in answering both of these questions.
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FloQast offers “close management software”, which may be a bit vague in the absence of a thorough understanding of accounting. FloQast Chief Executive Officer Mike Whitmire on the phone to discuss the concept in greater detail. According to the tech executive, his company aids “teams cooperate around the month’s end closing — we assist teams in communicating and remaining on the same page during this process which occurs at the end of each month. We also provide slight automation of the tie-out and reconciliation process, among the steps in closing your books.”
What’s the point of all this? Because a business cannot report its financial performance until its accounts (accounts) are shut (finalized). Therefore, as Whitmire explained, achieving a 10-Q report or any other financial report is impossible without this kind of effort. In addition, since every business worldwide has books that must be closed, it is easy to see how FloQast can be found in the corporate landscape.
FloQast doesn’t target every business, however. According to Whitmire, the moment a business gets to “five people within the accounting department of the company” can be “where the problem begins to show itself”, which FloQast will help. In his opinion, the more complicated an organization grows, the greater the need for support that its software could offer.
It’s clear where we’re headed in the present. If you don’t, here are a few suggestions If the product FloQast offers is suitable for larger businesses, How quickly is the income (measured by annual repeating revenue or ARR) increasing, and more specifically, how fast is its average per year contract value (ACV) growing?
We previously reported that FloQast was able to raise a smaller round before its Series C, using the money to create a brand-new product before raising its subsequent, larger capital. The product, dubbed “AutoRec,” makes use of what they call “AI” to aid in reconciling accounts quicker than possible.
The gamble, which was to launch the product before Series C, proved to be a success. In the last year, FloQast’s annual contracts value (ACV) was up 60 per cent. The CEO drove the increase through a “new AutoRec product [helping add more quality” to contracts and his firm’s efforts to target high-end customers. The growth in ACV helped FloQast’s increase in percentage as the CEO has told TechCrunch that his company grows as if it’s “clockwork,” doubling its ARR each year. The company’s SaaS metrics are also a good fit for customer churn. FloQast has an overall retention rate of 115 per cent, which is solid.
In a summary of his company’s past year or as it was, Whitmire said that FloQast “cut its the cost of cash burning, became efficient, increased its revenue at the same rate as the past as well as kept our revenue retention rate of the net as well as having this massive ACV increase.” It’s not difficult to figure out how FloQast came up with its most recent round.
The LA area is more than Snap and Bird. It is possible to build large SaaS businesses there, too.