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Rewiring the Financial Data Graph: Our Series A Investment in Numeric

October 10, 2024

In nature, there’s a saying that all crustaceans eventually evolve into crabs. Similarly, in the finance and accounting profession, all the data on a company’s operations eventually converges into a journal entry. 

Accounting and finance teams spend their days looking at reams of data spanning everything from payroll and accounts payable to fixed asset schedules and sales commissions. They then synthesize all of it to produce financial statements like the income statement, provide the rest of the business with the right data for decision making, and work with third parties like auditors. This work today is done in a mishmash of Excel spreadsheets with ad hoc analyses, software point solutions, and duct tape for porting and reconciling data between systems. 

Leaders set out with high hopes of high-quality data, but they inevitably run into the brick wall that is the ERP (enterprise resource planning) system, which serves as the general ledger and source of truth for a company’s financial data. Although these ERP systems, like NetSuite and SAP, have immense flexibility, they reduce the rich context and analysis behind a data source to a single journal entry in the database (like the crab!). This loss of information makes it extremely difficult for teams to understand the context behind these journal countries, spot errors, and speed up their work. On top of that, these ERP systems are 25+ years old, hard to read or write data from, and frequently rely on manual data entry for inputting upstream financial data.

Numeric is tackling this problem with an accounting automation platform that sits alongside an ERP to empower companies to record, analyze, and act on the rich context in their financial data. After investing in the seed round earlier this year, we quickly doubled down to lead their $28M Series A

Based on the CEO Parker Gilbert’s prior experience building and scaling a finance team from scratch, the Numeric team has started by facilitating the close management process. His initial insight is that the close process is the point in the data stream where all data sources meet the internal accounting teams. These teams need to consolidate all of their ledgers, calculate subledgers (e.g., fixed assets, prepaid amortization, lease capitalization, etc.), review and edit journal entries to ensure GAAP compliance, reconcile accounts, and conduct flux analyses to produce financial statements. Imagine an hourglass: The data sources are the top of the funnel, Numeric sits in the middle, and all downstream financial decisions or analysis (tax, risk management, corporate strategy, FP&A, etc.) flow out, so owning the neck of the hourglass is the most strategic place to start. 

The team’s second key insight is that rebundling the mass of point solutions and spreadsheets into a single platform can dramatically accelerate teams and lay the foundation for a better accounting system. A generalized approach that can easily integrate source data and generate composable subledgers based on the data type means the system can differentiate between a convertible note vs. a prepaid software contract vs.  and each of their associated workflows. Building the system in this way allows for automating key recurring workflows, providing better granularity in reporting and analytics, and improving auditability with drill-downs back to the source data. By hiving off more and more of those subledger blocks, Numeric is laying the foundation for a new type of financial operating system.

Andrew Bihl (Co-Founder & CTO), Parker Gilbert (Co-Founder & CEO), Anthony Alvernaz (Co-Founder & CPO)

The Numeric team sees AI as a key ingredient for achieving this generalized approach and empowering teams to do their best work. Many accounting workflows begin with an accountant reading a lease, a contract, or an invoice to extract key terms, create relevant policies, and make decisions. Numeric is using LLMs to read these documents, provide context on GAAP-compliant accounting policies, and generate code to create a subledger that accurately calculates the accounting entry, then exports it to Excel with formulas for review by a human. Or, take the flux analysis process: Customers can use Numeric to scan through every transaction and then generate first drafts of key drivers of differences between quarterly numbers.

It’s clear how much Numeric is impacting customers. We have never heard such levels of customer love from buyers (controllers and CFOs) who are not prone to puffery. Several of Menlo Ventures’ fastest growing companies are relying on Numeric to automate their close process, and every quarter, more and more public companies are seeing what the future financial stack looks like and are switching over to Numeric. And it’s obvious how important founder-product fit is here—Parker lived this problem as a former VP of Finance, and his co-founders, Andrew and Anthony, understand how to stitch together complex, messy data sources into easily consumable products from their time at Segment and Blackrock.

We’re thrilled to be partnering more closely with Parker, Andrew, and Anthony, and think that just as Rippling built an employment graph and Salesforce built a sales graph for companies, Numeric is the first company succeeding in building the financial graph that unifies disparate data silos, workflows, and subledgers.