Numeric Raises $28M for AI to Kill Accounting
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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 are 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 going to be 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

Before we do, I would love to tell you about a new project I have, which is called the AI hustle school community. If you've ever wanted to make money with AI tools, I would love for you to join the school community where I share exclusive videos every single week. We have an amazing community of over 180 people that are working on projects, doing

growing their businesses, scaling them with AI tools. We break down everything we use, confidential stuff we don't share in public. We'd love to have you as part of the group. The link's in the description. It's $19 a month. In the future, we'll probably raise the price, but if you lock it in now, it'll never raise on you, and we'd love to have you as part of the community. So you can go check that out in 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, Parker is...

Parker's the 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, you know, 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 just trying to automate things with software and then they added the AI element. This is actually a trend that I see being incredibly powerful with a lot of different companies. They start as a powerful software company. And then now that all of these AI capabilities have caught up, they implement that and they're the fastest ones to grow. They're the ones raising the most money because they already had 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? Um, I was impressed. They have Brex open AI plaid and wealth front that are all currently their accounting departments over there are all currently using them. Brex is a bank open AI, obviously a plaid is a connects banks and FinTech companies together and wealth front. 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 close automation. And they really say that leading teams, organizations, and organize their close, streamline reconciliation, and leverage AI for auto-drafted flux analysis and lightning fast reporting. Okay. So flux analysis, what that means is that they'll run their AI system through your books and they can look at things like

Uh, you know, they can look at your, your accounting software and they also can look at like, um, spreadsheets. So, you know, if you've got like everything on a Google doc, which I don't recommend running your accounting through a Google doc, but if that's how you're doing it, they can, they can essentially analyze that and your accounting software and run through. Now, the flux analysis means that they are looking line by line on how much you spent last month versus how much you're spending this month. And if there's any big outliers, if anything moves a lot, um,

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, um,

They have it linked. So for an accountant to review after, I wouldn't say this 100% replaces the accountant. This thing runs through your books, speeds it up. The accountant can go after. It's going to make notes of any time there's the 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.

This is really, really interesting. They say that they are an AI native platform leading the space with new features released every month. So this is something that's actively growing. Now, how much money have they raised? Who they raise money from? They put out a press release with this most recent raise and they had some interesting information there. So they said essentially this $28 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 now this brings them up to, I mean,

they raised a little bit prior to the seed round, but seed round in series a, they're now at $38 million that they've raised. And I feel like you see this a lot of times when there's a company really on fire, if they're doing well, they raise around, uh, they, they just jump right into another one. Half the time it's because a lot of the VCs and other people are kind of knocking on the door asking to invest because they can see this as a productive play. Um, so in this $28 million series a, they had Menlo ventures. Um,

They had IPV, Soci Capital, Founders Fund, 8VC, 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 forexing their annual recurring revenue, let's say they were at, you know, like $250,000, now they're at a million dollars, 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 that they did say that I thought was interesting, they said, well, 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 out already, 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 numerics legal expenses were much higher in October than September, it'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 then it's giving you line by line explanations of everything and why everything changed. I think this is a great use case for AI. Yeah.

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, they're not actually done by generative AI, which is, again, interesting when everyone's like, well, yeah, I platform, we do all this cool stuff, like I mentioned at the beginning of the episode.

People use robust software. They add AI to do different elements of it, but that 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, I don't, 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 the AI is going to do this. So what sets them apart? Why would they be different? Why are people giving them money? Are other people doing this? What's the competitive landscape looking like, right? So Kroon Betty, that's a

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 he said numeric is one of the ones that really got his interest. He said, quote, numerics moat is a lot deeper than a lot of areas we were looking at.

It marries complex workflows 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 this workflows and data stuff that isn't necessarily generative AI. It's a lot of the software pieces, they're doing quite well. And then they're adding the AI stuff in there and

The mo is just that like this stuff is complex. It takes a lot of, a long time to rebuild. Sometimes even if someone goes and like looks at a software company and 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 backend and all the tie-in stuff and, and figure out some of the sneaky ways they got around limitations. It,

takes a lot longer than you'd think. Uh, and when sometimes when I hear these VCs on podcasts talking about the fact that AI, they're like, we're just going to use AI to completely, you know, replace Salesforce. Like, uh, I think a lot of people speculated that, that this is what, uh, 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, they're

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 backend 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 will catch you next time.