When Finmark founder Rami Essaid built an earlier startup, he saw firsthand how difficult it is to build accurate financial models. When he sold that startup, Distil Networks, to Imperva 2019, he decided to build a new business that could help.
Launched in July 2020, Finmark helps companies build advanced financial models without having to use Excel. “We had a dissertation on helping startups from pre-income to pre-IPO build financial models and get out of Excel,” Essaid explained.
He said they initially focused on early-stage companies, startups that hadn’t picked up yet, or had just grabbed a seed round. There was a reason to keep the target market in that range – the models were less advanced, which allowed Finmark to build the first iteration of the product faster.
The approach worked. Essaid reports that more than 1,000 companies are using the product, of which about a third are paying customers. This early success forced them to move further into mid-sized companies with revenues between $5 million and $75 million with more complex modeling needs.
“We just crossed over to close some of those deals and get some of those bigger companies on board. And so we keep building more advanced features into the product and keep trying to make it easier for founders to manage their finances without any help. even if they don’t have an advanced financial person in the house,” he said.
The company came out of Y Combinator last year and gave Finmark access to a number of startups that need its services, allowing it to refine the product with their inputs.
Today, the company is partnering with other incubators and venture capitalists to offer the program for free or at a reduced rate for three to 12 months. This helps to stimulate use and increase product awareness.
The company has also invested heavily in content creation to help early businesses understand how to build more accurate financial models to ensure they don’t run out of money, which Essaid says is the number one reason startups fail.
“The main reason startups fail is that they are out of money. There are very few startups that just quit, right? If you know how much time you have left, you have more freedom of choice. Understanding this and planning more strategically to make sure you don’t run out of money is, I think, an important part of making startups successful.”
The company already has nearly 35 employees, so it has grown rapidly. It helps that he had another startup, which allowed him to tap into that network to find people he knew and trusted, but he also wants to add more diversity.
“I’ve thought it through carefully [to diversity] after we talked about it last time and one of the great things about this time for this company is that we are building it remotely so i have access to more diversity across the country than when i had my headquarters in san francisco earlier because that was such a homogeneous environment,” he said.
The company raised $6.5 million for this tranche of seed money. The round was led by American Express, along with existing investors Draper and Associates, Bessemer Venture Partners and IDEAfund. Previously, it raised $5 million in the first part of the seed investment.