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Start your free trial today. Welcome to the AI Chat Podcast. Today on the podcast, I'm going to be talking about a company called Numeric that has just raised $28 million in a Series A round of funding. And they're a firm that essentially automates accounting with AI.
I think this is fascinating, not just for what it's doing to accounting, but a lot of white-collar jobs that I think are going to follow with this. So today on the podcast, I'm breaking down everything that Numeric is doing, how they're able to raise $28 million, what they've raised before that, and everything else going on in the AI accounting kind of finance space. A lot of interesting companies, a lot of interesting players in this space. So let's get into it.
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I'd love to have you as part of the group. So go check out the link in the description. Let's talk about Numeric. So what's amazing here is Parker Gilbert.
He is one of the co-founders back in 2020. This is Parker's guy in the middle if you're watching on YouTube or on Spotify. But otherwise, he, back in 2020, was super fed up with all of the tedious finances, managing all of that as an early stage company. So he decided to co-found Numeric to essentially get over this problem that he was having.
And the idea was really to use generative AI, which they introduced a couple years later, to really boost their capabilities, right? So before everything was as hot with AI, they were mostly trying to automate things with software, and then they had the AI element. This is actually a trend that I see being incredibly powerful with a lot of different companies. They started as a powerful software company, and then now that all these AI capabilities have caught up, they implement that, and they're the fastest ones to grow.
They're the ones who are raising the most money, because they already have a solid product. They don't have to start from scratch, you know, building out databases and backends and all that, like, regular stuff. They already kind of have the core, and then they can scale it with AI. Okay, so who is actually using them?
I was impressed. They have Brex, OpenAI, Plaid, and Wealthfront. They're all currently, their accounting departments over there are all currently using them. Brex is a bank, OpenAI, obviously, and Plaid connects banks and fintech companies together, and Wealthfront.
So, like, these are major players, which I've been really impressed by, and of course, there's a lot of others. Now, Numeric on their website, they call themselves an AI-powered closed automation, and they really say that leading teams organizations organize their closed, streamline reconciliation, and leverage AI for auto-drafted flex analysis and lightning fast reporting. Okay, so flex analysis, what that means is that they'll run their AI system through your books, and they can look at things like, you know, they can look at your accounting software, and they also can look at, like, spreadsheets, so you know, if you've got everything on a Google Doc, which I don't recommend running your accounting through a Google Doc, big outliers, if anything moves a lot, they have their AI, they have their software, go and double-click, and essentially tell you what happened, why you spent more money in this category that you didn't spend last month or last year, et cetera, and so they then can send this to you. Now, some people have been concerned, you know, I've heard some concerns about this type of software, where they're like, gee, what if there's, like, hallucination, what if it can't, like, calculate this accurately, what's going on?
They said that the number one way they're actually solving for this right now is by, essentially, they have it linked, so for an accountant to review after, I wouldn't say this is 100% replaced accountant, this thing runs through your books, speeds it up, the accountant can go after, it's going to make notes at any time there's a big flux stuff, it's going to make notes of everything that's going on, an accountant can go and, you know, line by line check through the work, check through the links to make sure everything is solid. So, this is really, really interesting, they say that they're an AI-natal platform leading the space with new features released every month, so this is something that's actively grown. Now, how much money have they raised, who have they raised money from, they put out a press release with this most recent raise, and they had some interesting information there, so they said, essentially, there's $20 million that they've raised, this is their Series A, what's crazy to me is this is only five months after they raised $10 million in a seed round, so just back in May, so in this $20 million Series A, they had Menlo Ventures, they had IPV, Soci Capital, Founders Fund, ABC, Long Journey Friends and Family, Capital, Access Industries, and a bunch of others, so this is pretty impressive, and the reason why they were able to do this is because over the last year, their annual recurring revenue has grown 4X, so this was happening, this trajectory was started before they even raised their $10 million, right, so if they're 4X-ing their annual recurring revenue, let's say they were at, you know, like $250,000, now they're at $1 million, that's at a really impressive growth rate, and that's when you're going to see these investors kind of piling in and doing these really quick back-to-back raises. They're really excited about it.
They said investors and Numeric customers are excited for the same fundamental reason. It's clear that accounting teams today spend too much time manually organizing, correcting, reconciling, and synthesizing their financial data, so they're building a solution for this, and they're really excited about this. One thing they did say that I thought was interesting, they said, like, we're talking about people that are using Numeric, they said, accounting teams drive audit-ready, accurate, and actionable financial data with less manual work. They're saying that these things are audit-ready, so, like, I mean, these companies really don't want to over-promise and under-deliver, and when they're saying these things are audit-ready, I think it's really, I think they really have something cracked as far as making this thing quite bulletproof and quite solid.
So, overall, I'm impressed with the direction. They're used by a lot of big players, including OpenAI, and they're being invested in by a lot of big players, including Founders Fund. So, big players investing, big players using them, it seems like this is a fairly solid company. One thing that's interesting, Gilbert, who's their CEO, was kind of talking about what they do.
He was giving an example. He said, so, if an AI agent notices that Numeric's legal expenses are much higher in October and September, we'll write an explanation along the lines of, quote, your legal expenses went up this month because you paid Wilson X amount more for your funding. So, it's literally looking through your books, and it's giving you line-by-line explanations of everything and why everything changed. I think this is a great use case for AI.
And, again, you know, they kind of address the hallucination issue by saying that it cites its work, and they built a bunch of custom stuff on top. What was interesting to me that I really do not hear this narrative from a lot of people, because he says currently, the calculations that they're doing are not actually done by generative AI, which is, again, interesting. Everyone's like, we're an AI platform, we do all this cool stuff. Like I mentioned in the episode, people use, like, robust software.
They add AI to different elements of it, but it doesn't mean generative AI is literally doing all the computation. What's interesting is our CEO actually believes that this is going to change, but currently he says that all of their, you know, tie-outs and calculations are not done by generative AI. Just, I mean, math, and maybe it uses AI or maybe it uses software to determine what needs to be calculated, but the calculations are done with a calculator. I mean, in my opinion, I don't know why we need generative AI to do math or be better at math when we should just embed calculator plugins to stuff, but that's just me.
In any case, Gilbert said, quote, in terms of synthesizing large quantities of data, LLMs are incredibly good at this today and I think are only going to increase, or increasingly get better. So this is interesting. He believes that AI is going to do this. So what sets them apart?
Why would they be different? Why are people giving the money or other people doing this? What's the competitive landscape looking like? So Kroon Betty, that's part of our mental ventures, obviously top VC firm, he said he spent a lot of time looking at a bunch of different companies that are in the software kind of AI space and said numeric is one of the ones that really got his interest.
He said, quote, numeric's moat is a lot deeper than a lot of areas we were looking at. It marries complex workloads with complex data in a market that has not well been served by tech companies. So I think he's really speaking to the fact that it's kind of linking a lot of his workloads and data stuff that isn't necessarily done in advance. That's a lot of the software pieces they're doing quite well and then they're adding the AI stuff in there and the moat is just like this stuff is complex it takes a long time to rebuild.
Sometimes even if someone goes and looks at a software company they're like, oh look, it's doing X, Y, and Z thing. We could clone their website and clone their X, Y, and Z to actually figure out how to do that clone, pull that off and do all the back end and all the kind of stuff and figure out some of the sneaky ways they got around limitations. It takes a lot longer than you'd think and sometimes I hear these VCs on podcasts talking about the fact that AI they're like, we're just going to use AI to completely replace Salesforce. I think a lot of people speculated that this is what some companies have done lately that said they're using it to replace like Salesforce and Workday and stuff.
It's not literally recreating Salesforce and Workday. Those are the complex. It's just doing, it's creating agents that can do some of the same work. It's organized different.
It doesn't have the same back end or databases. There's arguments on both sides of that but it really does take a long time to do some of this stuff. So the last thing I want to talk about is some of the other players in the space. So there's two accounting firms specifically that I think they compete with the most.
One of them is publicly traded and it is backline and the other one is FlowQuest. That is, it's about 11 years old. It was last valued at $1.6 billion when it raised at Series E just this year in April. So it's going up against big players but it's really coming in hot and it's doing an amazing job.
So I think this recent $28 million in their Series A is fantastic news for them. I'm excited to follow along with this startup. I'll keep you up to date on what they're doing and how they're able to progress. But overall, exciting times, exciting startup.
And again, if you're interested in making money with AI, scaling your business or starting a new one, I would love to have you as part of the AI Hustle School Community. Amazing community. We share tips and tricks and help you reach your financial goals and everything else in that group. So you can check it out.
Link in the description. Hope you all have an amazing rest of your day and I'll catch you next time.