Market Overview

ScaleFactor Lands $10M Series A Funding Round to Power Financial Operations for SMBs

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  • Financial operations software suite built for Main Street business
    owners
  • Integrated hub enables SMBs to bridge the survival gap that leads to
    business failures
  • Funding round led by Canaan Partners with participation from
    Broadhaven Ventures, Citi Ventures, Next Coast Ventures, Flyover
    Capital, Firebrand Ventures and strategic angel investors

ScaleFactor,
the smart finance and accounting platform that enables businesses to
operate in real-time, today announced a $10 million Series A funding
round led by Canaan Partners alongside Broadhaven Ventures, Citi
Ventures, Next Coast Ventures, Flyover Capital, Firebrand Ventures and
strategic angel investors. The new capital will be allocated to
expanding ScaleFactor's marketing and business development teams as well
as investing heavily in enhancing technology offerings on its modern
accounting platform for SMBs.

Founded by former ‘Big Four' CPAs and with upwards of 850 percent
year-over-year growth, ScaleFactor is positioned to become the financial
operations suite of choice for the 19
million companies
in the U.S. with under 100 employees.

This latest round of funding comes on the heels of ScaleFactor's $2.5
million seed round
in November 2017, participation in Techstars
Austin Accelerator session in spring 2017 and a $370,000 angel round in
2015. Fueled by SMB demand for a seamless hub to integrate and manage
all financial operations, ScaleFactor is experiencing rapid customer
growth as it expands its team and operations.

Empowering small businesses to focus on the bottom line versus
administrative tasks

"The small-business ecosystem is rife with stories of failure, and we
want to curb that," said Kurt Rathmann, CEO and founder of ScaleFactor.
"Caught between the work they love and piles of financial
administration, too many small business owners end up neglecting the
work they excel at. The business flounders as a result. It's time for
that fate to end, and here at ScaleFactor, we've built the answer."

ScaleFactor bridges the ‘survival gap' that swallows up an estimated 80
percent
of small businesses. Unable to afford enterprise-grade
financial operations technology, and overcommitted to effectively track,
budget and project finances using spreadsheets, small business owners
often succumb to failure by fatigue. By automating taxes, inventory,
invoicing, bill pay, payroll and 1099 management, and integrating with
other core software like Xero, Quickbooks, Gusto, Expensify, Salesforce,
Shopify and others, ScaleFactor becomes the reliable hub for all things
financeand enables business owners to focus on growth.

Investor Thoughts on ScaleFactor Series A Round

"ScaleFactor is one of the most thoughtful and complete platforms in all
of SMB fintech," said Michael Gilroy, who led the round from Canaan
Partners. "The company has a massive opportunity to become the central
hub of financial and business operations for SMBs, and I'm thrilled to
partner with this team for the journey."

"By using machine intelligence and automation to address critical issues
like cash flow, compliance and payroll, ScaleFactor removes the friction
from SMB finance and delivers insights to time-starved small business
owners," said Luis Valdich, Managing Director, Citi Ventures. "In a
world increasingly reliant on fast transactions and informed action,
ScaleFactor's technology couldn't come at a better time."

"With technological innovation comes complexity," said Michael Sidgmore,
partner at Broadhaven Ventures. "A lack of viable financial-integration
options has left SMBs fighting to keep up, not only with the intricacies
of their own businesses, but with evolutions in payments, blockchains
and the like. ScaleFactor is positioned to become a new trusted resource
for SMBs wishing not only to modernize, but to excel."

"No other SMB financial platform has the deep expertise of the
ScaleFactor team," said Amos Schwartzfarb, managing director of
TechStars Austin. "By combining an intuitive user experience with an
intimate knowledge of what small business owners need from their
financial systems, ScaleFactor surpasses anything else on the market."

"One of the technology trends we remain focused on is the changing
future of work, and we don't think the back office is immune to that,"
said Thomas Ball, co-founder and managing director of Next Coast
Ventures. "Back office operations are almost always a pain point for
growing businesses, and we think ScaleFactor's technology will empower
business owners to manage, track and budget their finances, allowing
them to focus on scaling their business."

About ScaleFactor

ScaleFactor is the smart accounting and finance software that is
changing the way modern businesses operate. 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. Find out more about how ScaleFactor is solving the problems
that businesses face every day at scalefactor.com.

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