Announcing Our Investment in Leapfin

Jul 28, 2022
Announcing Our Investment in Leapfin
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We’re excited to announce our investment in Leapfin’s $12.2M Series A, led by Crosslink Capital. This funding comes after we led their Seed II in 2019. 

Leapfin is a Financial Data Management solution that provides CFOs real-time revenue visibility and confidence in their GAAP financials. They serve many of the world’s leading digital brands, including Canva, Reddit, SeatGeek, Flexport, Vimeo, and more.

The Problem

Leapfin was founded with the massive mission to create a single source of truth for finance teams, born from the previous experience of founders Raymond Lau and Erik Yao.

Ray personally felt the pain points of financial visibility while working in Business Operations at Zynga, where his team was responsible for critical business decisions for the $12B+ business. Despite how data-driven the rest of the company was, the Business Operations team was lacking: 

“In a company that was so data driven with every product metric at its fingertips, we, ironically, felt like outsiders. My boss would ask me a simple question – what’s the ROI if we add $5M in ad spend for Poker Mobile next quarter? To answer, I’d ask my data analyst to help pull a bunch of Tableau reports and my financial analyst to pull a bunch of reports from our Oracle ERP. After 2 weeks of Excel magic, I’d have the answer - by that time, my boss had already forgotten what the analysis was even for.”

Ironically, while financial data is the most important data within any company, CFOs often have to rely on month-old, stale financials to make critical business decisions.

Today, finance teams usually run extremely manual, time-consuming, and error-prone processes to close the books every month that take anywhere from 6 days to 2 weeks. By that time, the data is out of date and less effective in answering key business questions on-demand, helping revise financial plans and forecasts in today’s rapidly changing macro environment, and managing numerous SOX and financial control risks.

Most companies store their financial data in an ERP (enterprise resource planning system), which are inherently inflexible due to their fixed data models that require specific workflows and data relationships. This means that any variable outside of the standard monthly procedures creates tremendous inefficiencies and requires customization.

This is challenging for today’s digital companies that use up to 100 back office SaaS products at any given time - all with siloed financial data and massive financial data creation thanks to the 108.6 million credit card transactions occurring in the US every day. 

This is even more challenging for hyper-growth companies whose high-volume growth creates millions of records transacted and more data complexity with dozens types of data sources (billing, payments, events, etc.). 

The Solution

The “aha” moment for Ray came when he realized ERP solutions like Oracle and NetSuite are no longer the system of record for financial data for modern businesses, but rather a system of record for summarized month-end journal entries, and only capture a snapshot in time.

The data, computation, and analytics that are needed to compute these journal entries are often sitting in dozens, sometimes hundreds, of different systems and Excel spreadsheets, managed by hand by accountants and financial analysts.

Leapfin is rethinking the problem from the ground up. Their secret sauce is two-fold: 

  1. Financial Data Platform - which consolidates data from existing financial systems and standardizes data models. 
  2. Revenue Subledger - which automates transaction-level journal entries based on business events and generates summary journal entries into a general ledger on a daily basis, automatically translating them into GAAP compliant financial events, at massive scale.

Most of Leapfin’s customers previously had a “franken-stitched” solution –  a home-grown data warehouse mashed together with a business intelligence tool. By dealing with all the messy data, data silos, computations, and summarized outputs at the right level, Leapfin provides their customers with the critical data infrastructure layer for their company’s financial data.

Looking Ahead 

Leapfin has built a powerful and elegant solution to create a single source of truth for finance teams, and this Series A funding will allow Leapfin to fuel their ability to serve customers and accelerate product development. It will also allow them to grow their amazing team - check out their open roles!

Congratulations on this milestone!

Read more in TechCrunch and on the Leapfin blog. If you know of a high-volume digital business, check out Leapfin for more.

Jess speaking at Leapfin’s Offsite in 2021
Leapfin GTM Offsite, May 2022 - All you can eat Brazilian BBQ :)

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