Host Analytics, a company that provides cloud-based financial analytics tools, announced $25M in Series E funding today, and suggested the next logical step for the company is going public. Today’s funding brings their total to date to $77M.
The round was led by Centerview Capital Technology. Also participating were previous investors Advanced Technology Ventures, Next World Capital, StarVest Partners, and Trident Capital.
Host Analytics plays in the financial analysis space and competes with the likes of Tidemark and Anaplan for cloud-based financial planning. All these companies share the common goal of moving modern financial reporting tools from the confines of Excel to the cloud where they can begin to make decisions in closer to real time, rather than dealing with older information that only gives a picture of where the company has been.
The company brought in Dave Kellogg, the former CEO of Mark Logic to be CEO in 2012 and he has overseen a period of big growth. In fact, Host Analytics CFO Ian Charles told me he believes the company got this funding in part because it has been growing consistently, claiming 120 percent year over year growth.
Charles admits that CFOs tend to be a risk averse group, and even though the company has been around since 2001 in its original guise as a consulting firm, it has grown steadily and waited for the market to come to it. Today, he says CFOs are much more likely to embrace a cloud solution than in the past. The stereotype in finance is the Excel expert cranking out the numbers, but Charles and others in this space believe that’s not really a sustainable model in an increasingly competitive market that requires much faster decision making.
He says while Excel does some things well, there are technical limitations, and it isn’t nearly flexible enough. He believes this is something that more CFOs are beginning to see as well. As that happens they are becoming more comfortable with cloud solutions from companies like Host Analytics, Anaplan and Tidemark.
But the fact is that there is some competition in the space, even from the legacy vendors as well, and as we’ve seen time and again, there are typically only one or two winners in each space after which there is a steep drop off to the lesser players. Venture funders tend makes bets across a category with each one backing a different player, knowing not everyone can win.
This is a lot of money and these funders believe Host Analytics is the company worth backing. Time will tell if they are right or not. The company is certainly confident and believes it’s ready to take it to the next level and go public at some point. It’s worth noting, however, that we have seen little stomach for subscription-based models like Host Analytics on Wall Street recently, but it could be a matter of Wall Street coming to better understanding of the subscription economy.