Today, we’re thrilled to announce our $10M Series A round, led by Canaan Partners alongside Broadhaven, Citi Ventures, Next Coast Ventures, Flyover Capital, Firebrand Ventures and others. This is an exciting milestone for our team, and is pivotal as we continue to reimagine accounting and finance solutions for the millions of small businesses fueling our economy.
A Small Business CFO in Search of Operational Efficiency
My first vision of ScaleFactor preceded my efforts to actually start the company. In my former role as a CFO in Denver, CO, I was facing accounting problems that stemmed from operational inefficiencies that kept me up at night. I lacked time, and had an organization running on “old school” manual processes. It took so much focus to get reliable data that there wasn’t much time to actually analyze it to make better business decisions. It seemed backwards, and I knew there had to be a better way.
Unfortunately, I couldn’t find a solution that solved the problems that are unique to small businesses. Virtually all businesses – regardless of size – need to manage their finances and operations efficiently to grow. But small companies, those with fewer than 100 employees, are often overlooked as technology vendors remain fixated on large companies. Small businesses need to manage things like cash flow, payroll, and compliance differently than large enterprise companies.
I was searching for something to help me save time, understand what was currently happening and prioritize the most important tasks while the business operated along its normal day-to-day. When I couldn’t find it, I decided to solve the larger problem that I faced, one that millions of entrepreneurs still face every day. ScaleFactor started bootstrapped in January 2014 at my living room table in Austin, TX cultivated from the painful reality of financial business operations to modernize an age-old industry ripe for change.
The Small Business Dilemma
Accounting is stale, dated, and very technical. The traditional monthly close process forces business operators to wait until the end of the month to assess their financial health and take action. It’s no longer acceptable to rely on last month’s data to make today’s decisions, especially when they fuel the heart of your business. So why wait 30+ days to address your financial needs?
Today, a typical small business might use services like Xero or Quickbooks for accounting, Gusto for payroll, Expensify for expense management, Shopify to manage channels, Salesforce for dashboarding or Bill.com for bill pay, creating a network of data silos that becomes difficult to manage, and ultimately inhibits growth. Business owners are already busy managing the day-to-day, on top of wearing many hats. Perhaps you have a trusted barber, a favorite yoga studio or you frequent a local coffee shop. The challenge for these business owners is both peculiar and universal. Their time is best spent cutting your hair, teaching you downdog and making your latte, not reconciling transactions, catching up on inventory or paying bills. The catch: they have to keep up with these tasks to stay in business, but with their limited time and the lack of resources in today’s market, they often have no other options.
This is exactly why we’ve built ScaleFactor. Small businesses no longer need to silo their data into multiple software subscriptions, and are no longer forced to wait until the end of the month to decide the next strategic move for their business. ScaleFactor delivers best-in-class automated solutions for bookkeeping, inventory, invoicing, taxes, forecasting, bill pay, payroll classification and 1099 management. We’re building technology to help businesses be proactive and scale, not just meet their basic needs. We are creating better business operators who ultimately power the mainstreet that we all know and love.
Reimagining the Back Office: a One Stop Shop for Small Businesses
Our automated bookkeeping and business intelligence solutions give business owners, managers and entrepreneurs the tools they need to be better business leaders with proactive alerts, prescriptive analytics and real-time insights. These AI-powered tools are built to remove the responsibility of performing mundane and time-consuming (but required) tasks from the owner or manager, saving them time and money while actually improving their financial accuracy.
ScaleFactor recognizes the need to have all of your information in one secure place. We realized early on that it’s not always practical for small business owners to access their important information from a computer. In today’s digital world, it sounds crazy, but most real-time accounting solutions for small businesses don’t have a mobile app. Real-time numbers on your phone can be the difference between going to your kid’s soccer game or being stuck in the office.
Our investors understand the importance of automating and streamlining business and finance tasks while disrupting the very way it has been done for years. Their support enables us in our quest to power the small business ecosystem that impacts our world. We are grateful for their support, guidance and confidence in our ability to unlock that potential within our customers.
Our customers are our partners, and are at the heart of what we do every day. We continue to focus our direction based on their daily needs. We are excited to continue to create value for them and to enable their success. Without our customers, we would be nothing. We love and appreciate every opportunity we get to make their business lives easier with less uncertainty.
Lastly, I must thank our incredible team. It has been a remarkable mission to get to this point and I could not be any more proud to get to work with you all every day. It is inspiring to strategize and create with such a motivated, smart group of people. We know that there is much terrain ahead and I am inspired and grateful to be on this journey with you.
ScaleFolks, do not stop rebelling against the way this has always been done in the past. Continuing challenging every step with a pursuit of efficiency and experience. Iron sharpens Iron. Focus. Be easy to work with. Love and be grateful. Remember, we get to do this every day.
Thanks for taking the time to read this. If you’re interested in learning more about the how ScaleFactor is solving the problems that businesses face every day, schedule a demo. We’d love to give you a tour.
Onward and Upward,
Kurt Rathmann, CPA
CEO & Founder, ScaleFactor