Numeric Lands $28M Series A to Streamline Accounting Through AI

Accountants often face significant challenges during month-end and quarter-end closings due to the manual, time-consuming, and error-prone nature of the process. This common frustration led Parker Gilbert, overwhelmed by the tediousness of managing finance and accounting at an early-stage startup, to co-found Numeric in 2020. Numeric is an accounting software designed to automate parts of the book-closing process. The introduction of generative AI (genAI) further enhanced Numeric’s capabilities, allowing it to be adopted by notable companies like Brex, OpenAI, Plaid, and Wealthfront.

Numeric has experienced rapid growth, with its revenue increasing fourfold to reach the single-digit millions over the past year. This success has attracted the attention of investors. Just five months after raising a $10 million seed round from several well-known investors, Numeric has raised a $28 million Series A round, led by Menlo Ventures with new investors IVP and Socii. Previous backers, including Founders Fund, Long Journey, 8VC, Friends & Family Capital, and Fifth Down, also participated in this round.

Numeric's platform streamlines the accounting process by shaving days off the monthly book-closing cycle. It aggregates and reconciles data from various accounting systems and Excel spreadsheets, overlaying the data with an AI agent. This AI agent identifies changes in line items from the previous month and explains any significant variations or outliers. For example, if legal expenses rise from September to October, the AI might generate a note explaining, “Your legal expenses went up this month because you paid Wilson Sonsini $X amount more for your funding.” This eliminates much of the time accountants typically spend performing flux analysis, or documenting variances in accounts.

One concern with AI-generated commentary is the potential for AI hallucinations, where the AI might produce incorrect or misleading explanations. However, Gilbert assured that Numeric mitigates this risk by providing links that allow accountants to verify the AI's work at any time.

Currently, the tie-out and calculations are not performed by AI, but Gilbert anticipates that Numeric’s model will soon be able to handle these tasks with accuracy. He expressed optimism about the potential of large language models (LLMs) to synthesize large quantities of data, expecting their performance to improve further.

Croom Beatty, a partner at Menlo Ventures, explained that Numeric caught his attention as one of the first startups truly disrupting the accounting software space. He emphasized that Numeric’s advantage lies in its ability to combine complex workflows with complex data, a challenge that has not been adequately addressed by most tech companies in this market. Beatty also predicted that Numeric could expand into other areas, such as financial planning and analysis (FP&A), a market currently dominated by Anaplan.

Numeric faces competition from two primary accounting software companies: Blackline, a publicly traded firm, and FloQast, a startup valued at $1.6 billion after its Series E round in April 2023. However, Beatty highlighted that what Numeric is doing is highly complex and difficult to replicate, which may explain the relative lack of new AI-powered entrants into the accounting software space. This complexity gives Numeric a significant competitive advantage, positioning it as a key player in the future of accounting automation.