Fintech startup ScaleFactor raises $30 million Series B funding to empower small businesses and accelerate back office automation

ScaleFactor, a fintech startup that enables small business owners to focus on their core business by automating complex back-office operations, has secured $30 million Series B round of funding to add new product features, hire more staff at its Austin headquarters and expand nationwide. The latest round was led by Bessemer Venture Partners, with participation from returning investors including Canaan, Broadhaven Ventures, Firebrand Ventures and multiple prominent angel investors. Bessemer Venture Partners is one of the country’s most experienced early-stage venture capital firm and the largest cloud portfolio in the industry.Bessemer Venture Partners’ other investments include Shopify, Twilio, SendGrid, DocuSign, Box, MindBody, Adaptive Insights, Intacct, and Intercom. In less than six months, ScaleFactor has raised a total of $40 million in funding.

Founded in 2013 by Kurt Rathmann, ScaleFactor empowers small business owners by consolidating complex back-office operations into one platform to create an intuitive ‘business OS.’ By automating complex accounting tasks and translating financial information into usable business insights, ScaleFactor is enabling business owners, managers, and entrepreneurs to focus on what they love: running and growing their business.

“Businesses get overwhelmed by administrative work jumping from siloed solution to siloed solution and should be able to focus on what makes them successful,” said Kurt Rathmann, CEO and Founder of ScaleFactor. “Our vision of a comprehensive business operating system, built with their needs in mind, allows our customers to be proactive with their business, operate in control and drive success.”

There are 19 million companies in the U.S. with under 100 employees, all of which need to keep track of finances. Unfortunately, most of them are currently forced to handle these tasks manually, a painful and time-consuming process. They’re stuck between an Excel spreadsheet and software that can cost over $100,000. ScaleFactor is on a mission to help small businesses scale faster. By automating complex accounting tasks and translating financial information into usable business insights, ScaleFactor is enabling business owners, managers and entrepreneurs to be proactive and focus on what they love — running and growing their business.

“The market for how companies manage their financial operations has evolved quickly,” said Byron Deeter, Partner, Bessemer Venture Partners. “With Kurt’s roots as a CPA, he identified this problem early and guided ScaleFactor to be the leader in intelligent finance. We are excited to support their mission and growth.”

ScaleFactor realized over 700% annual customer growth in 2018. At a time when small and midmarket companies are often overlooked, ScaleFactor’s momentum is built off of a unique understanding of their needs. Since launch, the company has used these insights to build the “business operating system (OS)” for small and midmarket businesses. It’s a solution to the piecemeal approach companies currently use to solve the various accounting and back-office choirs. Current offerings include Automated Bookkeeping, Bill Pay and Invoicing, Cash Vision and Business Insights.

“ScaleFactor has assembled an optimal combination of technology and team,” said Anna Khan, VP, Bessemer Venture Partners. “ScaleFactor has grown at hyper-speed since its inception, and we are firm believers that AI-based accounting and (a streamlined) back office is the path forward for the majority of small businesses.”

In connection with the funding, ScaleFactor also announced three new executive hires: Francis Sullivan as its new CTO, Robert Gilbreath joins as Senior VP of Marketing,  and Eric Steinhoff. Eric started his career at Capital One and was most recently Chief Compliance Officer at Apple Pie Capital. Eric brings an impressive wealth of knowledge surrounding lending that will amplify ScaleFactor’s ability to connect small businesses to the best source of capital when they need it.

ScaleFactor Team