The article discusses the trend of venture capital (VC) funding for startups focused on CFO-related technology, particularly those that help with accounting and finance tasks. Here are some key points:
Increased VC activity in 2021: The amount of capital invested in CFO-focused startups reached $9 billion in 2021, up from around $2.9 billion in 2020.
Decline in funding in 2022: Despite the overall decline in fintech investment, VC funding for CFO-related startups only decreased by 23% in 2022 compared to 2021, which is half the percentage decline seen in fintech more broadly.
Cautious optimism for 2023: The article suggests that while some VCs remain optimistic about the CFO stack, there is less data to indicate that this hope is converting into conviction and financing. In fact, funding for CFO-focused startups seems to be off to a slow start in 2023, with likely hundreds of millions invested so far.
Historical optimism vs. current reality: The article notes that while some VCs were overly optimistic about the CFO stack in the past, leading to a wave of venture capital activity, there is currently less need for these startups to raise more funding as they have reached their capital needs and face limited competition.
Some potential implications of this trend include:
- Consolidation: As CFO-focused startups reach their capital needs and face limited competition, we may see consolidation in the space, with larger companies acquiring smaller ones.
- Shift in VC focus: VCs may shift their focus towards other areas within fintech or beyond, as the CFO stack becomes less exciting and less investable.
Overall, the article suggests that while some VCs remain optimistic about the CFO stack, there are signs of a slowdown in investment activity in this space.
