Organizations today — perhaps more than ever before — are relying on technology to help them figure out what the next weeks, months, and years will hold for their business at what has been one of the more tumultuous periods for our global economy in decades. Today, a company that is providing the platform to do that is announcing a significant fundraise to tap into that opportunity.
Jedox, a German startup that builds tools to help companies with their financial planning and analysis using data sourced from basic documents like Excel spreadsheets, has picked up a funding of over $100 million — it’s not specifying exactly how much — in a round being led by Insight Partners, with Iris Capital, eCAPITAL, and Wecken & Cie (all previous backers) also participating. The company currently works with some 2,500 customers including big players like Microsoft, McDonalds, and industrial giant ABB.
The company’s software was originally built to work on-premises or in the cloud, and mainly oriented towards financial planners. Over the last several years, Jedox has expanded that to a wider set of adjacent users, specifically in HR planning and procurement, and the plan with this funding is to expand Jedox’s applicability into an even wider set of use-cases and verticals. CEO Florian Winterstein — who joined the company in 2018 during its last fundraise — said that while Jedox the name doesn’t have any particular meaning, the company has landed on a focus on the “X”.
“We want to focus on more than just the finance department,” he said, and the company thinks of FPNA (financial planning and analysis) “as XPNA” as a result. Expanding beyond their original verticals “is what everyone in enterprise is doing right now.”
The company has raised around $150 million to date, and Winterstein said that Jedox is not disclosing its valuation with this round. But he confirmed that Insight took a majority investment, and that this funding comes on the heels of a lot of demand from financial and strategic investors to back the company. The company counts Microsoft and Salesforce (prolific strategic investors in the startup world) among its partners and sometime customers today — as well as acquisition offers from enterprise resource planning companies due to its traction and presence in the market.
“We have been approached tons of times, maybe every month, by companies from our space, from others in the area of financial services, and those looking for better tools to integrate into a wider suite of enterprise services,” he said. He called those approaches “interesting” but also said the startup was equally considering an IPO route in several years — the route that its closest competitor, Anaplan, has taken, he points out. In any case, there are no plans for an exit anytime soon with growth going strong.
Jedox got its start way back in 2002 and in a way is a very typical European startup story. Winterstein notes that its efforts were all open source-based and that the company was “not commercial at all, a lot of tech geeks and German engineering types that were not overly experienced in go-to-market strategies.”
That started to change over time, with Winterstein coming in and the founders stepping away, and the company also making its own shift, away from the open source model among the many changes that have taken place. (The open source elements, however, as still alive and well, collected mostly around the Palo open source standard.) Jedox, Winterstein, is all-in in cloud services now, with SaaS making up 75% of its revenues, and the remainder mostly being about professional services related to that.
(The focus on professional services ushered by Winterstein is notable, considering his track record. Before this role, he led and founded a number of companies, two of which have been acquired by IBM, which arguably leads and dominates the market of building tech with professional services wrapped around it.)
For a lot of tech watchers and especially those in enterprise, these days when people talk about modelling, thoughts often spring immediately to artificial intelligence and things like big data machine learning, and that’s not too much of a surprise: AI is really the flavor of the month at the moment.
A lot of that, however, can be misleading. I’ve heard more than one tech person complain about how a lot of what is pitched and peddled as AI is not really that.
What’s quite refreshing is the Jedox does not try do that itself.
“I get kind of annoyed by ‘what is AI’,” he said when I brought this up. “It may be simple predictions and statistical modeling they are doing.” He is quick to say that “not everything we do is AI, and if you look at our customer distribution, roughly 100 of our 2,500 customers are really using AI. Others are using what others may call AI but in the definition of what AI actually is, it is not.”
He said that Jedox is not without AI in its systems for modeling and giving a better picture of what might happen at a business when considering different factors, but that Jedox does not in all cases develop those algorithms itself.
“There are around 20-25 algorithms out there and we don’t think it’s necessary to create the next algorithm,” he said. Instead, the company taps AI services provided by the likes of Google, Microsoft and others to run its services on a backbone, built by Jedox, “that throws user or customer data on various AI services and our backbone to figure out which algorithm suits the data and use case of the customer best.”
Companies like Palantir have really brought to light how modeling and predictive insights can be used to an organization’s advantage. Jedox’s unique selling point is that it’s doing something like this but on a more actionable basis for average workers.
“Jedox offers a differentiated approach to financial planning through its flexibility, familiar Excel-based interface and focus on the customer,” said Jeff Lieberman, MD at Insight Partners, in a statement. “We are excited to partner with Florian and the Jedox team to bring market-leading cloud planning tools to industry leaders in every vertical, across the globe.” Rachel Geller, another MD at Insight Partners, and Henry Frankievich, principal, will be joining the board of directors with the round.