Market Alert: Datarails raises an $18.5 Million A Round to Support SMB Planning and Budgeting
On April 20, 2021, Datarails, which focuses on financial planning and analysis solutions for small and mid-market organizations, announced raising an $18.5 million Series A round led by Zeev Ventures Fund and joined by existing investors Vertex Ventures Israel and Innovation Endeavors. With this round, Oren Zeev joins the board. Previously, Zeev has invested in finance and accounting firms including GT Nexus and was a co-founder of Tipalti.
Datarails started as a data compliance solution to support financial services companies in 2015, but found market fit in 2020 by offering its data governance capabilities as part of a financial planning tool focused on small and medium-sized businesses using spreadsheets to manage their financial budgeting and planning needs. This pivot makes sense considering that financial planning and analysis has been a hot market over the past decade that has supported the growth of multiple vendors including Adaptive Insights, Anaplan, Board, Jedox, Planful (previously Host Analytics), and Prophix.
However, Amalgam Insights actually considers Datarails to be part of a second generation of FP&A vendors that are focused on making planning solutions more accessible, which also includes Budgyt, Centage Planning Maestro, Cube Software, Fathom, Jirav, Limelight, Pigment, and XLerant.
Among this peer group, Amalgam Insights finds Datarails’ Excel-based approach to be a differentiator. Datarails’ approach allows users to continue using Excel as their interface, but then saves the data in an Azure-hosted SQL database to provide business governance.
In reviewing the product, Amalgam Insights found the Datarails product to provide both the obvious advantages of working within Excel as well as a SaaS-based software interface that provided the full history of cell value and forumla changes and strong visualization capabilities.
Amalgam Insights notes that this approach is similar to the approach that Vena Solutions uses to govern data from an Excel interface. Since its founding in 2011, Vena has raised $173 million in funding with the latest round being raised in September 2020. However, Vena’s typical contract is over $100,000 per year to support business planning across finance and operations while Datarails is targeting smaller companies at a starting cost of $15,000 a year to support a team of up to 8 users and viewers along with an initial one-time installation fee of $5,000.
Overall, Amalgam Insights believes that Datarails’ approach and funding make it a viable option for consideration for organizations between 50 and 500 employees that are working on creating a collaborative budgeting and forecasting process. For these companies, Amalgam Insights expects that Datarails will be fully installed within 8-12 weeks of contract signing and provide a payback period of 6 months or less based on improvements to provide more timely reporting and forecasting, time saved by relevant finance and accounting professionals, and the risk mitigation associated with having data centrally managed compared to being in Excel spreadsheets.
Based on previous analysis, Amalgam Insights believes that this investment would typically provide a 300-400% annual Return on Investment based on the process improvements, productivity increases, and reduced risk associated with budgeting and forecasting reporting on a monthly, quarterly, and annual basis. (Note: This is a general estimate based on past analyses of FP&A projects. If you would like a detailed analysis, please feel free to contact us at email@example.com)