ScaleFactor Lands $2.5 Million in Funding to Make Accounting Products for Small Businesses

ScaleFactor has a new twist on accounting products for small business.

The Austin-based startup has created a finance and accounting platform that taps into machine learning to create more intelligent budgeting and forecasting information aimed at small business.

On Thursday, ScaleFactor announced it had received $2.5 million in seed round financing from Next Coast Ventures, Techstars Ventures, Firebrand Ventures, Matchstick Ventures, Edison Factory and Flyover Capital.

ScaleFactor’s business management software automates bookkeeping and is being marketed to the 29 million small businesses in the U.S.

“Accountants that don’t provide proactive guidance do a disservice to their clients,” Kurt Rathmann, CEO, and Founder of ScaleFactor, said in a news release. “ScaleFactor addresses this need and is uniquely poised to fundamentally change the way people perform accounting and finance functions in their small businesses. Our investors understand the importance of automating and streamlining accounting tasks and ScaleFactor’s technology is pivotal in moving the business from the reactive to the proactive space.”

ScaleFactor participated in Techstars Austin in the Spring of 2017 and it previously raised $370,000 in March 2015. The company plans to use the funds for further product development, according to a news release.

“Two of our investment themes focus on the future of work and full-stack software business models, and ScaleFactor’s product hits both of these right on the head,” Mike Smerklo, co-founder and managing director of Next Coast Ventures, said in a news release. “Their intuitive software platform doesn’t just empower better financial decisions by changing the nature of accounting and finance, it also streamlines business operations for human managers and creates a valuable experience for its users.”

“Small businesses need to be able to automate and optimize finance and accounting responsibilities in order to move towards proactive bookkeeping,” Derek Keller, principal, Techstars Ventures, said in a news release. “ScaleFactor provides business owners with just that – a central cockpit to monitor performance and unlock critical insights to further accelerate growth.”