Datarails Raises $25M to Empower SMB Financial Reporting

DataRails Secures $25 Million to Enhance Financial Tools for SMBs

As enterprise startups increasingly address market needs, more sophisticated tools are being developed for small and medium-sized businesses (SMBs). These companies often find themselves underserved by large enterprise solutions and require capabilities beyond those offered by consumer-grade products.

Series A Funding and Company Growth

DataRails, an Israeli startup, has recently raised $25 million to further develop its platform. This platform empowers SMBs to perform financial planning and analytics using the familiar interface of Microsoft Excel.

This funding completes the company’s Series A round, bringing the total to $43.5 million. Initial funding of $18.5 million was secured in April. Investors include Zeev Ventures, Vertex Ventures Israel, Innovation Endeavors, and Vintage Investment Partners.

DataRails has not disclosed its valuation, but reports indicate it has doubled in the last four months. The company currently serves hundreds of customers and aims to exceed 1,000 this year, with a primary focus on the North American market. To date, DataRails has raised a total of $55 million.

Addressing the Challenges Faced by SMBs

SMBs are increasingly adopting various software-as-a-service (SaaS) applications to manage their operations. This trend has been accelerated by the shift towards remote work and virtual interactions. Common applications include Salesforce, NetSuite, Sage, SAP, QuickBooks, Zuora, Xero, and ADP.

However, financial professionals within these businesses often lack the tools to consolidate and analyze data from these disparate sources. While Excel remains a widely used application, it typically involves managing numerous individual spreadsheets rather than integrated data analytics.

DataRails' Solution: A Unified Financial View

DataRails offers a platform that can ingest data from these various sources, often initially residing in Excel spreadsheets, and transform it into a comprehensive overview of the company’s financial performance.

Excel’s central role in SMB operations, coupled with its limitations in extensibility, served as the initial impetus for founding DataRails.

From General Analysis to Focused FP&A

Didi Gurfinkel, CEO and co-founder, along with Eyal Cohen (CPO), initially envisioned a broader product capable of analyzing and visualizing data from any Excel source.

“Our initial goal was to liberate users from the constraints of Excel spreadsheets,” Gurfinkel explained. The core technology is designed to extract unstructured data and map it to a centralized database. Founded in 2015, DataRails initially focused on applications within banking, insurance, compliance, and data integrity.

Over time, the company identified a specific need within the SMB market: a platform for financial planning and analytics (FP&A). This niche lacked a dedicated solution, allowing DataRails to gain a competitive advantage.

The Value Proposition for SMBs

“SMBs are already investing significantly in software, yet they often lack the analytical insights to maximize its value,” stated Gurfinkel.

This timing proved advantageous, as “digital transformation” and data-driven decision-making were gaining momentum, particularly among SMBs. CFOs and financial leaders were actively seeking solutions to unlock the potential of their data.

Accessibility and Ease of Use

DataRails caters to businesses ranging in size from 50 to 1,000 employees – a segment often overlooked by expensive and complex enterprise solutions. Cohen emphasized the platform’s low-code or no-code approach, eliminating the need for extensive IT involvement.

“This ease of use is a key driver of our success,” he said. “We are breaking down barriers and making our solution accessible to a wider audience.”

Competitive Landscape

While DataRails currently faces limited direct competition, companies like Cube are emerging in the space. Additionally, companies like Stripe, while currently focused on payments, are expanding their offerings and could potentially become competitors in the future.

Future Expansion and Market Opportunity

Looking ahead, DataRails plans to expand its capabilities beyond FP&A to include areas such as HR, inventory management, and broader business planning. The company is also exploring the potential to support other spreadsheet formats or even move beyond spreadsheets altogether.

The substantial market opportunity – over 30 million small businesses in the U.S. alone – is a major factor driving investment in DataRails.

Investor Confidence

“We are excited to continue investing in DataRails and supporting their rapid growth,” said Yanai Oron, general partner at Vertex Ventures. “Their innovative and accessible technology, combined with a large untapped market, positions them for success as the leading FP&A solution for SMBs.”

Oren Zeev, founding partner at Zeev Ventures, added, “Financial reporting is a continuous process for businesses. DataRails simplifies and streamlines FP&A, and we are confident in their vision.”