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Saturday, Feb 24, 2024

Accounting Startup Looks Far Afield for Funds

When raising money for his software firm, Michael Whitmire knew his unsexy product would be a hard sell for investors in Los Angeles. “It’s accounting – it’s not the coolest spot to be in,” said Whitmire, co-founder and chief executive of FloQast in Sherman Oaks. With local venture capitalists preferring to put their money into consumer-and entertainment-oriented startups, Whitmire looked instead to the San Francisco area, where he spent a lot of time during the second half of last year. “Admittedly I got a lot of no’s given the environment we were in, but as soon as we got the first couple of term sheets on the table, from there I started getting a lot of yesses and we were oversubscribed on our round,” he said. FloQast received $6.5 million in Series A funding, co-led by Polaris Partners in Boston and Toba Capital in San Francisco. Gary Swart, a partner at Polaris, joined the FloQast board. Toba was also among the investors providing FloQast with $1.3 million in seed money in 2014. Amplify LA, Siemer Ventures, Danmar Capital and various L.A. angel investors also participated in the seed round. Founded in 2013, FloQast offers a software application that allows finance professionals to collaborate, organize documents and automate some tasks, such as closing out financial books and reconciling accounts to make sure the amount of money coming in matches the money spent. The company’s software was built out of what Whitmire experienced when he was an accountant with Ernst & Young doing the books for midsize public companies and later a startup that went public. “The software is tailored toward that midmarket since it came out of my background,” Whitmire said. Focusing on small and midsize companies is what differentiates FloQast from BlackLine, a Woodland Hills company offering similar reconciliation software but with clients that are in the Fortune 500, such as Dow Chemical Co. and Coca-Cola Co. The new financing will allow the company to double its employee head count from 12 to more than 20, Whitmire said. “Having $6.5 million in the bank is going to allow us to do much bigger things,” he added. Data Driver With the amount of data on the Internet growing fast, Nomadix Inc. of Agoura Hills has created a device to measure and understand that data. Chief Operating Officer Fred Reeder said the company’s Alloc8-X device monitors and controls a computer network and provides analytics on the amount and type of data accessed. “Those factors can pay off,” Reeder said, “not only from the administrative perspective in figuring out what’s going on, but it pays off in improving the user experience on the network and can create cost savings by managing demand and not just managing capacity.” The Alloc8 comes in four models, which can handle traffic from 200 megabytes to 10 gigabytes. The starting list price is $4,800. The Internet works not by constantly streaming data but instead by sending small bursts of data packets to a computer, smartphone or tablet, where they are reassembled into the content the user wants, whether that’s a document, photo or video, Reeder explained. What the Alloc8 device does is inspect each packet and gives priority to one type of packet over another. For example, if a company has a video conference going on, a priority would be given to that use to prevent the loss of synchronization or the picture freezing up, Reeder said. Email, on the other hand, receives a lower priority and may come a millisecond or two later, which won’t be noticed by the recipient. Optical Awards An Ethernet access device and software package from MRV Communications Inc. were recognized by a computer industry publication in its third annual review of products that drive improvements and innovation in optical technology. The Chatsworth computer network equipment company was recognized by Lightwave magazine for its Pro-Vision software and OptiPacket OP-X1 in the 2016 Lightwave Innovation Reviews. Pro-Vision scored 4.5 on a scale of 5 points in the review, whose judges included executives from Verizon Communications Inc., Cisco Systems Inc., Lumentum Holdings Inc. and Chinese multinational Huawei Technologies Co. Ltd. Together, the software and device can move more data as required by cloud computing. “Our Pro-Vision and OptiPacket OP-X1 products reflect our ongoing investment in the development of market-driven products that enable new, state-of-the-art solutions,” Vice President of Strategic Marketing Zeev Draer said in a prepared statement. Staff Reporter Mark R. Madler can be reached at (818) 316-3126 or mmadler@sfvbj.com.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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