ScaleFactor’s Series A: Fuel for Our Economy’s Engine
July 30, 2018
Going from Seed to Series A is a big deal for any startup, especially these days. I first met ScaleFactor CEO Kurt Rathmann in early 2017 when I was mentoring at the Techstars Austin program. During that three-month program, led by friend Amos Schwartzfarb, they successfully transitioned from an accounting services business to a SaaS company and released their automated bookkeeping solution to small businesses. Their ability to quickly execute on this transition was super impressive and they were obviously solving a big problem for SMBs. That’s when we were convinced this was something special and decided to invest in ScaleFactor’s Seed round alongside friends at Techstars Ventures, Next Coast Ventures, Matchstick Ventures, and Flyover Capital.
The team is always the most important factor in our investment criteria, and during the twelve months after graduating Techstars Kurt and his team continued to execute on their mission: to automate accounting, tax and finance tasks to save small business owners time and money. Small business is truly the engine that drives our economy - businesses with fewer than 500 employees create 66% of all new private sector jobs and employ about 58 million people in the U.S. However, more than half of these small businesses fail before reaching their fifth year of operation, often because they struggle with managing and forecasting cash flow.
This is where ScaleFactor comes in, delivering a best-in-class automated platform for bookkeeping, inventory, invoicing, taxes, forecasting, bill pay, payroll classification and 1099 management. Their automated bookkeeping and business intelligence solutions provide business owners, managers and entrepreneurs with proactive alerts, prescriptive analytics and real-time insights. In other words, ScaleFactor lets small business owners focus on running their business by giving them key financial management tools and forecasting insights. And instead of having to manage siloed applications such as payroll, accounting, expense management, bill pay, and sales dashboards, ScaleFactor is the central hub that integrates with all of these and more.
We’re thrilled to continue supporting ScaleFactor in their $10M Series A round, and welcome lead investor Canaan Partners along with other new investors including Citi Ventures and Broadhaven. The best part of my job is interacting with exceptional founders and supporting their growth. I have no doubt ScaleFactor will continue their incredible trajectory as they become the financial operations suite of choice for the more than 29 million small businesses in the U.S.