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Float rises on £1.5m venture investment

Edinburgh-based cashflow forecasting software house Float has accepted £1.5m in funding led by Marchmont Ventures.

15th Jan 2020
Head of Insight AccountingWEB
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Previously reliant on business angels and seed funding, Float CEO Colin Hewitt said the funds will enable the company to open a new office in Australia, capitalise on the growth in the cashflow forecasting market and support further product development.

“The big thing is the office in Sydney – we’re really ramping up,” said Hewitt. “The response we’re seeing in the cashflow space is really exciting. We’re seeing demand, and responding – and the investors are seeing it too.”

The company would not disclose the equity share or valuation on which the transaction was based, nor how many thousand numbers it was now supporting. However, it is clear Float made a persuasive case that it was “very close if not at” breakeven point this year and ideally positioned to ramp up.

While MTD diverted a lot of effort and attention away from new accounting approaches, cashflow forecasting has built into a growing phenomenon over the past two years.

While rival Fluidly has bagged £5m in funding from the Banking Competition Remedies fund and Futrli came out with a new, small-business prediction and alerting Platform, Float quietly pursued along its cash-focused forecasting path, winning the 2019 Forecasting, Analysis and Planning Software of the Year Award.

Hewitt identified two factors driving the company’s growth. “Businesses now realise they’ve got digital bookkeeping and cloud systems in place with MTD. The next logical step is, what can we do with this data looking into the future?

“If a report stops today, then people will think, ‘What’s next?’ Somebody is going to have a red face if they can’t answer that question – and nobody wants to do that on a spreadsheet. Before those [cloud tools] were in place, nobody was really asking for that at any level of volume.”

The second driver is happening among practices that are thinking about what clients would like to see next. “They’ve gone through MTD and are now starting look at what else they can offer to get into advisory services. I think it’s the right time for cashflow forecasting to come of age,” said Hewitt.

Ahead of the investment, Float added chief marketing, technology and operating officers to its management team and appointed Alan Martin from Marchmont to sit on the board alongside them.

Hewitt talked about the “great professional and cultural fit” with Marchmont. After spending a couple of strategy days at investor Hugo Burge’s Marchmont House in the Scottish Borders, he commented: “The fact they’ve run and scaled a large software company and taken it into US as well is exactly what we were looking for.”

Board member Alan Martin used to be the CFO at Momondo, Hewitt added: “He’s been there and has real experience – he recognises the pain of forecasting.”

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