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DataRails, which automates financial reporting for Excel users, nabs $18.5M

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DataRails, an Israeli startup that wants to help businesses understand their financial data better — and more quickly — has raised $18.5 million in funding as it looks to double down on its enterprise integrations and invest in its AI capabilities.

The raise comes amid a flurry of activity across the financial planning and analytics sphere, with OneStream this month raising $200 million at a $6 billion valuation, shortly after Jedox locked down more than $100 million.

“Businesses typically spend between 10 to 14 days every month on manually gathering data from different sources and bringing it together to understand the current status of the organization and try to predict future performance,” DataRails cofounder and COO Eyal Cohen told VentureBeat. “Despite their efforts, the results tend to be difficult to analyze, error-prone, and lacking insights. DataRails shortens the time spent on this to a few hours and allows organizations to get better insights into their business.”

Legacy

Founded in 2015, DataRails has entered a space that includes legacy players such as Anaplan; Hyperion, which Oracle bought for more than $3 billion in 2007; and Adaptive Insights, which Workday acquired for north of $1.5 billion in 2018. But the biggest incumbent DataRails is up against is arguably trusty old Excel. This is particularly true for small to medium-sized businesses, according to Cohen, as they use Microsoft’s omnipresent spreadsheet software for all their month-close and management reports, budgets, forecasts, and more.

“Although there are well-established solutions in the FP&A [financial planning and analysis] market, more than 80% of small and medium-sized organizations conduct their routine processes manually, using Microsoft Excel and PowerPoint,” Cohen said. “The reason that this persists as the status quo is due to the fact that existing solutions require redesigning existing models and processes, leaving behind years’ worth of invested time in analyses, models, and reporting templates.”

Excel’s persistence is one of the reasons we’ve seen a slew of newer players enter the FP&A market — such as Cube Software and Vena Solutions — taking a more modern approach that works on top of familiar spreadsheets. DataRails takes a similar path insofar as it seeks to supplement — rather than replace — Excel. It has created what it calls an “elastic database technology,” one that can transform spreadsheets into a structured database. Underpinning this are AI and machine learning algorithms that can take both structured and unstructured spreadsheet data (e.g. cell values, formulas, formats, and macros) to develop a “logical, centralized database.”

“With this technology, DataRails automates existing Excel-based processes by leveraging existing models and templates to create one unified database,” Cohen said. “DataRails combines the flexibility of Excel with the power of a cloud-based database and a web-based dashboard.”

DataRails’ customers, which include businesses from across the medical, transport, manufacturing, and cybersecurity spheres, can access the platform as a layer directly on top of Microsoft Excel and PowerPoint, which perhaps is how a financial analyst is most likely to use it. But it can also be accessed through a dedicated web interface, where management, executives, and board members would be more inclined to go to access data and insights.

Above: DataRails dashboard

It’s worth noting that DataRails can also glean data from sources such as enterprise resource planning (ERP), customer relationship management (CRM), and human resource information systems (HRIS), including Netsuite, Quickbooks, SAP, Salesforce, and Microsoft Dynamics. And given that its interface is based on Excel, DataRails can connect with pretty much any tool capable of exporting data as a CSV file.

“DataRails has very strong analysis capabilities, thanks to the fact that cross-organizational data, from all financial and operational systems, is housed under one roof in our unified database,” Cohen said. “With all organizational data centralized in one place, customers can conduct variance analyses [and] drill-downs for full-scale granularity and quickly design ad-hoc reports.”

DataRails had previously raised $10 million, and with another $18.5 million from Zeev Ventures Fund, Vertex Ventures Israel, and Innovation Endeavors, the company is well-financed to add more data and analytics tooling to its platform.

“We’re looking to add stronger analysis capabilities, as well as newer prediction capabilities and better insights,” Cohen said.

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