Numeric Secures $28M in Series A Funding to Revolutionize Accounting Automation with AI Technology

Accountants often dread the month-end and quarter-end closing processes due to the manual, time-consuming, and error-prone nature of finalizing financial records.

In 2020, Parker Gilbert, frustrated by the tediousness of finance and accounting in an early-stage startup, co-founded Numeric, an innovative accounting software that automates key aspects of the book-closing process. With the rise of generative AI in subsequent years, Numeric's capabilities have significantly expanded, earning it a place in the accounting departments of well-known companies like Brex, OpenAI, Plaid, and Wealthfront.

In the past year, Numeric has experienced remarkable growth, with revenue increasing fourfold into the single-digit millions. This surge has attracted a wave of investors. Just five months after raising a $10 million seed round, Numeric secured a $28 million Series A led by Menlo Ventures, with support from new investors IVP and Socii. Returning investors such as Founders Fund, Long Journey, 8VC, Friends & Family Capital, and Fifth Down also participated in this funding round.

Gilbert, now CEO of Numeric, explained that its product enables accounting teams to reduce their monthly book-closing time by several days. The software consolidates and reconciles data from diverse accounting systems and Excel spreadsheets, then employs an AI agent to analyze monthly changes in financial line items. If the AI detects any anomalies or unexpected shifts, it provides explanations, saving accountants significant time typically spent on variance documentation, a process known as flux analysis.

For instance, if the AI agent identifies a steep increase in legal expenses from September to October, it might generate an explanation such as, “Your legal expenses rose this month due to a $X increase in payments to Wilson Sonsini for your funding.”

Concerns about AI inaccuracies in flux analysis are common; however, Gilbert assured that Numeric mitigates this risk by providing links for accountants to verify the AI’s findings at any time. While generative AI is not yet responsible for tie-out and calculations, Gilbert anticipates that Numeric's model will soon offer this capability with high accuracy. “Large language models excel in synthesizing vast amounts of data, and I believe they will only improve further,” he noted.

Croom Beatty, a partner at Menlo Ventures, highlighted his extensive search for a disruptive force in accounting software and remarked that Numeric was among the first startups that captured his interest.

“Numeric offers a much deeper moat than many other companies we considered,” Beatty said. “It integrates complex workflows with intricate data in a market that has often been overlooked by technology firms.” He foresees Numeric expanding its product offerings to include financial planning and analysis tools, an area currently dominated by Anaplan.

Numeric faces competition from established accounting software giants like publicly traded BlackLine and FloQast, an 11-year-old startup valued at $1.6 billion following its Series E funding this April. Regarding the lack of new AI-driven contenders in the accounting software sector, Beatty pointed out that Numeric's approach involves complexities that are challenging to replicate.