Accounting software developer FloQast Inc. has received $40 million in a series C funding round, led by a Silicon Valley venture capital firm.
The Van Nuys company will use the money to accelerate customer expansion and drive technology innovation for corporate accounting teams. Norwest Venture Partners, in Palo Alto, led the round, with participation from existing investors Insight Venture Partners in New York and Polaris Partners in Boston.
Sean Jacobsohn, a partner at Norwest Venture Partners, joined the FloQast board of directors. FloQast has raised $93 million since 2014.
Chief Executive Mike Whitmire said he has a relationship with Jacobsohn going back to his days at Cornerstone OnDemand a decade ago.
“A fun fact is that he said no to my seed round, my A round and my B round,” Whitmire said. “But here we are as part of the investement of the C round.”
So what changed in that time?
Whitmire admitted FloQast was a high-risk investment in the company’s early days. He was an entrepreneur from the non-traditional backgound of accounting starting his first company and did not know a lot about building and selling software, he added.
But then the staff grew and the company began to do well and the market responded to its products. When BlackLine Inc. in Woodland Hills went public in October 2016, it validated a really big market opportunity and made FloQast more attractive to investors, Whitmire said.
“I think all of that stuff, the progress of the business and us as entrprenuers, got (Jacobsohn) excited about FloQast,” Whitmire said. “He was aggressively pursuing the Series C and really wanted to be involved in the company.”
In a statement, Jacobsohn said that FloQast’s growth and vision for the accounting software market made the company an ideal investment.
“Controllers and accounting departments across a growing number of markets are standardizing their accounting operations on FloQast to drive more accurate and effective reporting, accountability and compliance, and to give the organization’s senior executives greater visibility into the performance of the company,” Jacobsohn said.
The company will use the money for continued investment in its two core products – a close management solution and AutoRec, a product released last year. There will be additional hires to work on those programs, Whitmire said.
Additonal hiring will also be done for a new, third product that the company has started work on.
“I want to keep that confidential for the time being and not give away the road map, but that will come out at towards the end of 2020 if not 2021,” Whitmire said.
And, lastly, there is international expansion.
The company has a decent roster of clients worldwide, having done well in Europe and in Central and South America, he said.
Whitmire feels confident that FloQast’s products work well internationally and now the company is feeling out whether it can sell effectively to international markets, Whitmire continued.
“Once we prove that, we look to open a physical office in whichever city makes the most sense,” he added.
Last year, the company made major strides in growth of the business.
It added AutoRec, its new product that automates the account reconciliation process; continued to expand its partner program, adding more than three dozen new consulting and channel partners; grew the number of accounting professionals using the platform by more than two-thirds; and added 275 new customers, including ride share service Lyft Inc. and the Chicago Cubs baseball team.
Whitmire said that the company has done well in bringing sports teams into the fold.
Starting with the Golden State Warriors in 2015, FloQast found that its products were a good fit for sport franchises because their accounting departments tend to be between five people and 20 people, which is right in the wheelhouse for the software.
“It worked out really well and once the first domino fell we started reaching out to more,” Whitmire said, adding that the company now has between 15 and 20 teams in all the major league sports, but “not the Dodgers. I am sad to say.”