Raleigh-based fintech Finmark secured $6.5 million in additional seed funding from American Express Ventures, the startup announced yesterday.
This additional funding from American Express Ventures joins earlier funding from a group of existing investors, including Durham’s IDEA Fund Partners, bringing Finmark’s total seed funding raised to more than $11 million.
Finmark was founded in 2020 to give startups the tools they need to understand their company’s finances, plan for growth, fundraise quicker and build accurate financial models.
Finmark’s CEO and Founder Rami Essaid was inspired to create Finmark after a financial model mistake almost killed his last startup, the cybersecurity company Distil Networks. They didn’t realize until around five months after the error that the CFO mistakenly double-counted cash on hand due to a mis-entered formula in Excel. As a consequence, they had to lay off around a third of the company.
It took a while to recover from this stumble, Essaid said, although they did end up selling Distil Networks in 2019 for more than $100 million. Still, the mistake might have cost them “a comma,” Essaid said, since their biggest competitor ended up selling for $1 billion.
Finmark was conceived as a way to prevent other founders from making the same kind of mistakes.
“The more I talked to other founders, the more I realized that Excel was just a terrible way to build your model or to understand your finances, and a lot of people just didn’t do it,” Essaid said. “So that was the genesis for Finmark—to make it so that other founders can understand the finances better in every way.”
Finmark is an engine where startups can put in their assumptions at the top lines, with Finmark doing all the calculations to show you how to get there. For instance, for a given revenue projection, Finmark can help you see how many salespeople are needed. Essaid describes it as software that’s making the work of putting your ideas down on paper easier.
When Finmark began in 2020, it hit the ground running, launching the first version of its product just six months in. It participated in the prestigious Y Combinator accelerator, and connections made through that program led to many of the initial beta customers.
Moving up-market is fueling growth
Over the past year, Finmark experienced substantial growth, launching several new features and functionalities to help startups and growing companies understand their finances with greater depth. Already, more than a thousand companies have come onboard to use the software. While the software was originally built for very early-stage startups, Essaid and his team have discovered that larger startups and SMBs with between $5 million and $75 million of revenue have also been attracted to the enhanced tools—significantly expanding Finmark’s addressable market.
“It all boils down to very similar ways of building a company,” Essaid said. “Companies are a lot more the same than they are different, and it gets us really excited about the opportunity of sharing the knowledge from company to company.”
American Express presented itself as an ideal partner because of who its customers are, Essaid said.
“The synergy is really great,” Essaid said. “We’re excited about the work we’re doing leading towards bringing Finmark to all their customers.”
The seed funding ultimately will enable Finmark to hire more product and engineer roles, growing the company from its current 34 employees.
“It just allows us to keep going and go faster,” Essaid said. “American Express is a great brand. It gives us a lot of credibility, but they also have a really large customer base that is just perfect for us.”