Putting your Finance Tech Stack in Shape: Gat Paid Faster with Automation

Explaining why Moneta VC invested in Gaviti

At Moneta VC, we partner and invest in world-class Fintech teams. As a VC in the Fintech domain, we interact with fintech start-ups and financial institutions on a daily basis, and in the past year we noticed that new corporate finance technologies are emerging at an ever-increasing rate. Finance teams look to optimize their workflows and modernize the way they operate. We witnessed an overflow of unicorns disrupting the “old-way” of managing corporate finance, such as Melio, Tipalti, Brex, iValua, and Airwallex.

With such a variety of solutions for finance departments, we asked ourselves what will be the next “must have” software solution that will supercharge finance teams’ productivity? And how could Fintechs better serve more industries and segments? The answer to these questions became clear when we met the founders of Gaviti. A meeting that led to our investment in the company in January 2021.

Gaviti helps businesses get paid faster. As simple as that.

It is a SaaS platform for collections teams that enables businesses from all sizes and industries to get more of their invoices paid faster. Gaviti’s solution optimizes the complete collections process, from automating highly personalized dunning emails to perfecting task management. Finance teams that use Gaviti enjoy payments forecasting, risk scoring, and actionable insights to enhance collections performance over time. By automating the Accounts Receivables (A/R) collection process, Gaviti’s customers improve their DSO (Days Sales Outstanding) by 30% and increase positive cash flow.

Let’s take a step back and understand what exactly is broken for finance teams –

It’s all about the cash flow

It is a common assumption that once you deliver the goods, the payment part will take care of itself. The thing is that in real life it is seldom the situation. In every industry that practices sales on credit, there is about a 50% chance that invoices will be paid late, and 4% of the invoices never get paid. Businesses today still fail in keeping cash flows optimal due to inefficient A/R collection operations. As trivial as it may sound, being paid late may pose a huge risk for business continuity. Thus, cash flow is the lifeblood of any business, and those who manage it represent the frontline workers of the corporate world. A/R is an essential element of maintaining positive cash flow.

With such a variety of solutions for finance departments, we would expect that A/R teams would be the first to enjoy the fruits of automation and digitization. Is that so? Apparently, this is far from being the case. Surprisingly, cash flow management and projection as well as A/R teams, rely heavily on hours upon hours of simple but necessary number crunching and invoice-related tasks: Accountants go over aging A/R reports via Excel, analyzing it, and put a lot of efforts and resources in communications vie phone/email to collect unpaid invoices from debtors.

Not only that this manual way of doing things is far from efficiency standards we are used to, but it may also harm the experience of the customers. A 2020 Walker study found that personalization, ease, and speed are the three constant expectations for B2B customers, while a PWC report discovered that one in three consumers (32%) will walk away from a company they love after just one bad experience. A/R teams typically have the most customer touchpoints, which means that collections operations are at the coalface of customer relationship management. Engaging through digital channels has become the standard to ensure positive customer experience, and A/R collections efforts shoudn’t be differ.

All this lead to the understanding that businesses today must look into A/R collections automation to minimize manual tasks, identify risks, optimize reporting and team collaboration, and improve end-to-end customer experience.

Why Gaviti?

Gaviti was founded in 2018 by Yan Lazarev and Alex Komarovsky. It was their own experience working at a publicly-traded tech company’s finance team that led to found Gaviti. Assisted by a top-of-the-line ERP system and massive resources, and yet the collection team hit the wall in terms of its ability to scale A/R collections. Yan’s team was drowning in manual collection tasks, largely unable to improve its organization’s DSO or to improve cash flow. Realizing that there are many companies worldwide experiencing the very same challenges, the two decided to establish a new startup that would optimizes the complete collections process, from automating highly personalized dunning emails to perfecting task management.

Gaviti is the only AR collections platform that integrates with any pre-existing finance  software stack. Gaviti is quick to implement, no matter what ERP you are using, be it a monolithic ERP system or an online accounting solution like Quickbooks. The solution fits like a glove to the AR collections team, empowering them to quickly see results, and to be able to share the data and actionable insights with whomever needs access in real time.

This brings us to the point that impressed us the most – Gaviti’s desire to create value to those who need it the most. Users in enterprises that may lack modern IT environments, those who were not “born in the cloud” and still hold legacy ERP systems, are way underserved when it comes to modern finance software stack. Generally speaking, the mid-market segment suffers the most from long setup and integration cycles when adopting new software, as on the one hand they do not own very modern software stack with API-based connectors, but still require high level of configuration to fit the complex financial and business processes. The outcome is that many corporate finance technologies fail in showing profound product-market fit for mid-market users. The ease of integration makes Gaviti the ideal solution for mid-market users.

Conclusion

Gaviti’s platform assists collect receivables to those who need it the most, in times when they need it the most: The COVID-19 containment measures put pressure on both sides of the cash-flow “equation“ and a major consequence is that payments all along the supply-chain are being delayed. Gaviti’s automated solution is the next big thing of modern finance software stack, and we expect it to set the new standard of A/R collections.

We are very excited for this great opportunity to partner with Yan and Alex, the founders of Gaviti, together with the company’s existing investors from N1V and TAU Ventures.