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YC-backed Abacum nets $7M to empower finance teams with real-time data and collaboration tools

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SaaS to support mid-sized companies’ financial planning with real-time data and native collaboration isn’t the sexiest startup pitch under the sun but it’s one that’s swiftly netted Abacum a bunch of notable backers — including Creandum, which is leading a $7M seed round that’s being announced today.

The rosters of existing investors also participating in the round are Y Combinator (Abacum was part of its latest batch), PROFounders, and K-Fund, along with angel investors such as Justin Kan (Atrium and Twitch co-founder and CEO); Maximilian Tayenthal (N26 co-founder and co-CEO & CFO); Thomas Lehrman (GLG co-founder and ex-CEO), Avi Meir (TravelPerk co-founder and CEO); plus Jenny Bloom (Zapier CFO and Mailchimp ex-CFO) and Mike Asher (CFO at Neo4j).

Abacum was founded last year in the middle of the COVID-19 global lockdown, after what it says was around a year of “deep research” to feed its product development. They launched their SaaS in June 2020. And while they’re not disclosing customer numbers at this early stage their first clients include a range of scale-up companies in the US and in Europe, including the likes of Typeform, Cabify, Ebury, Garten, Jeff and Talkable.

The startup’s Spanish co-founders — Julio Martinez, a fintech entrepreneur with an investment banking background, and Jorge Lluch, a European Space Agency engineer turned CFO/COO — spotted an opportunity to build dedicated software for mid-market finance teams to provide real-time access to data via native collaborative that plugs into key software platforms used by other business units, having felt the pain of a lack of access to real-time data and barriers to collaboration in their own professional experience with the finance function.

The idea with Abacum is to replace the need for finance teams to manually update their models. The SaaS automatically does the updates, fed with real-time data through direct integrations with software used by teams dealing with functions like HR, CRM, ERP (and so on) — empowering the finance function to collaborate more easily across the business and bolster its strategic decision-making capabilities.

The startup’s sales pitch to the target mid-sized companies is multi-layered. Abacum says its SaaS both saves finance teams time and enables faster-decision making.

“Prior to using Abacum, finance analysts in our clients were easily spending 50% to 70% of their time in manual tasks like downloading files from different systems, copy&pasting them in massive spreadsheets (that crash frequently), formatting the data by manually adding and removing rows, columns and formats, connecting the data in a model prone to manual error (e.g. vlookups & sumifs),” Martinez tells TechCrunch. “With Abacum, this entire manual part is automatically done and the finance professionals can spend their time analyzing and adding real value to the business.”

“We enable faster decisions that were not possible prior to Abacum. For instance, some of our clients were updating their cohort analysis on a quarterly basis only because the associated manual tasks were too painful. With us, they’re able to update the analysis weekly and take better decisions as a result.”

The SaaS also supports decisions in another way — by applying machine learning to business data to generate estimates on future performance, providing an AI-based reference point based on historical data that finance teams can use to inform their assumptions.

And it aids cross-business collaboration — allowing users to share and gather information “easily through workflows and permissions”. “We see that this results in faster and richer decisions as more stakeholders are brought into the process,” he adds.

Martinez says Abacum chose to focus on mid-market finance teams because they face “more challenges and inefficiencies” vs the smaller (and larger) ends of the market. “In that segment, the finance function is underinvested — they face the acute complexities of scaling companies that become very pressing but at the same time they are still considered a support function, a back-office,” he argues.

“Abacum makes finance a strategic function — we deliver native collaboration to finance teams so that they become the trusted business partner they want to be. We also see that the pandemic has accelerated the need for finance teams to collaborate effectively and work remotely,” he adds.

He also describes the mid market segment as “fairly unpenetrated” — claiming many companies do not yet having a solution in place.

While competitors he points to when asked about other players in the space are long in the tooth in digital terms: Adaptive Insights (2003); Host Analytics (2001); and Anaplan (2008).

Commenting on the seed round in a statement, Peter Specht, principal at Creandum, added: “The financial planning processes in many companies are ripe for disruption and demand more automation. Abacum’s slick solution empowers finance teams to be more collaborative, efficient and better informed with access to real-time data. We were impressed by their user-friendly product, the initial hiring of top talent, and crucially the strong founders and their extensive operational experience — including as CFOs and entrepreneurs who have experienced the problem first-hand. We are delighted to be part of Abacum’s journey to empower global SMEs to bring their financial operations to new levels.”

Abacum’s seed financing will be ploughed into product development and growth, per Martinez, who says it’s focused on wooing finance teams in the US and Europe for now.

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Haitian Activist Brings Awareness To Spate Of Violence Rattling Country

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NPR’s Michel Martin speaks with Jimmy Jean-Louis, a Haitian activist and actor who has been calling attention to the recent surge of violence and kidnappings in his country.

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Consumer agency warns against Peloton Tread+ use, as company pushes back

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Almost exactly a month ago, Peloton CEO John Foley wrote an open letter about the the company’s treadmill. “I’m reaching out to you today because I recently learned about a tragic accident involving a child and the Tread+, resulting in, unthinkably, a death,” it begins. “While we are aware of only a small handful of incidents involving the Tread+ where children have been hurt, each one is devastating to all of us at Peloton, and our hearts go out to the families involved.”

Today, the U.S. Consumer Product Safety Commission issued a warning, telling users to stop using the Tread+. Citing 39 incidents, included the aforementioned death, the CPSC writes, “The Commission has found that the public health and safety requires this notice to warn the public quickly of the hazard.”

Peloton followed up with its own strongly worded statement writing, “The company is troubled by the Consumer Product Safety Commission’s (CPSC) unilateral press release about the Peloton Tread+ because it is inaccurate and misleading. There is no reason to stop using the Tread+, as long as all warnings and safety instructions are followed.”

The commission’s warning includes multiple injuries involving small children and a pet. Specifically, the note calls for users with children at how to cease using the product, a more stern warning than the initial suggestions outlined by Foley back in in March, who at the time told users to keep children and pets away from the system and store the device out of reach after using. Peloton has since added that there have been 23 incidents involving children, 15 with objects and, as the CPSC noted, one with a pet. The company added that it had not revealed the specifics previously out of privacy concern.

“If consumers must continue to use the product, CPSC urges consumers to use the product only in a locked room, to prevent access to children and pets while the treadmill is in use,” the organization notes. “Keep all objects, including exercise balls and other equipment, away from the treadmill.”

For its part, the connected fitness maker adds,

Peloton invited CPSC to make a joint announcement about the danger of not following the warnings and safety instructions provided with the Tread+, and Foley asked to meet directly with CPSC. CPSC has unfairly characterized Peloton’s efforts to collaborate and to correct inaccuracies in CPSC’s press release as an attempt to delay. This could not be farther from the truth. The company already urged Members to follow all warnings and safety instructions. Peloton is disappointed that, despite its offers of collaboration, and despite the fact that the Tread+ complies with all applicable safety standards, CPSC was unwilling to engage in any meaningful discussions with Peloton before issuing its inaccurate and misleading press release.

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Why it’s not surprising to see nine-figure AI rounds 

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Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. If you want it in your inbox every Saturday morning, sign up here

Ready? Let’s talk money, startups and spicy IPO rumors.

This week, Scale AI raised a $325 million Series E. The company, as TechCrunch has written, works in the data labeling space. And it has been on a fundraising tear over the last few years. In 2019 TechCrunch wrote about how the company’s then-22-year-old CEO had put together a $100 million round. Then in December of 2020, it raised $155 million at a roughly $3.5 billion valuation. Now it’s worth more than $7 billion.

Impressive, yeah? Well, as I learned earlier this week, AI startups in general are having one hell of a year. From the start of 2021 to April 12th, there were 442 AI-startup deals in the U.S. worth $11.65 billion, according to PitchBook data. And the recent Microsoft-Nuance AI deal may accelerate things even more.

Sapphire Ventures’ Jai Das weighed in on the AI venture market for The Exchange. He answered our question regarding how competitive the space was in the first quarter by saying that “investment activity in AI/ML startups has been absolutely insane” during the first quarter.

Per Das: “AI/ML startups are routinely getting 5-6 term sheets from top-tier VC firms and they are able to raise their financings at 150-250X of current ARR.”

Chew on that for a moment. We’ve seen public software multiples reach new heights in the last year, but even for aggressive startup rounds, those are some bonkers numbers. Imagine an AI-focused startup with $1 million in recurring revenue being valued at a quarter of a billion dollars. Damn.

But what about pace among AI investing? We’ve heard that the time from a round opening to its closing among many startups has been compressed and compressed again. Das helped explain the situation, saying in an email that “most firms are completing their due diligence way before the financing actually happens,” which means that there is “no need to do any due diligence during the financing.”

That actually makes some sense? If rounds are largely preemptive — something that Das underscored later on in his comments — you have to do pre-diligence. Otherwise you’ll always be investing blind or missing out on deals due to other firms moving more quickly.

This week The Exchange also dug into the broader domestic venture capital market, with a special focus on seed deals, and the super late-stage investments that dominate headlines. A comment on the earlier-stages of venture investing that just missed our piece on the matter came from Jeff Grabow, EY’s U.S. Venture Capital lead.

In his comments on pre-seed, seed and post-seed deals, something stood out to us — a prediction of sorts. Here’s Grabow:

[Q1 2021] was a strong quarter for pre-seed funding when you compare it to prior years, and we expect the overall environment to remain strong given the abundance of capital available and plethora of investable themes that tap into new markets via technological solutions. It paints a rosy picture for the post-COVID environment.

That tracks with our internal estimates. Q1 2021 was so hot for at least American venture capital activity (expect more international coverage soon) that it seems likely that the year itself will be a record in many respects. Provided that things don’t slow too much, records will be broken. And here Grabow flat-out anticipates a pretty attractive climate for venture after COVID-19 is behind us.

So, records will be broken. The question is by how much.

More notes on Coinbase’s direct listing

Not to whomp the equestrian deceased too much, but I have a few more notes for you on the Coinbase direct listing.

Public.com, the Robinhood consumer trading rival, helped The Exchange better understand just how much retail interest there was in the stock. Per its ever-present spokesperson Mo, on April 14th, Coinbase “was the most popular stock on public,” measured by number of transactions. And perhaps more notably, on the same day “social activity (measured by the number of posts) increased by 70% compared to the day prior.”

I do not know how long the consumer trading boom can last, but that’s a pretty impressive set of metrics.

Similarweb also had a few data points to share, including that visits to coinbase.com reached 86.4 million in January. Hot damn. And during that month new visitors bested returning visitors. That data helps explain how Coinbase wound up with the epic first quarter that it did. Now the question is if it can keep up its bull run or, frankly, if consumer interest in trading in crypto specifically will outlast the equities trading boom or not.

Coinbase Series D lead investor Tom Loverro, who we’ve mentioned a few times this week, including on the podcast, said that we’re still merely in the second inning of crypto. So expect these topics to keep coming up again and again. And again.

Various and sundry

Trying to actually stick to our word count target for once, here are some final notes on the IPO market from the week.

First, the AppLovin IPO did not go according to plan. After modestly pricing at $80 per share, the middle of its range, the mobile-app focused tech company saw its value fall during its first two days’ trading. It’s now worth $61 per share as of the end of Friday.

The Exchange spoke with AppLovin CFO Herald Chen on its IPO day. Chatting with the finance executive, our read from the conversation is that the company could accelerate its acquisition game more now that it is public. Having a liquid stock means that it can be even more acquisitive than before. And AppLovin claims that it can buy companies, run them through its business process, and juice their revenues per its S-1 filing.

If that bears out, the public markets may be giving the company a bit too hard of a time. It was a bit odd to see a software company struggle post-IPO in today’s climate.

Chen also told The Exchange that his firm didn’t see any pushback regarding its multi-class share structure during its roadshow. The multi-class share miasm is something I’ve written about with our own Ron Miller. The CFO did note that no single person has complete control of the company, even with several different classes of equity with disparate voting rights. That matters, frankly.

We’ll keep tabs on AppLovin as it trades. (Our earlier coverage of its numbers is here.)

Finally, autonomous trucking company TuSimple went public this week, and Similarweb filed to go public. We’re also watching the broader IPO market as UiPath either raises its price range or note. We have a guess on that score.

And just as the week was closing, Squarespace dropped its S-1. Notes here with more to come.

Good vibes and nothing other than the best from here,

Alex

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