Datarails, a data integration and automation platform, raised $50 million in a Series C funding round, one of the largest venture capital to be secured by an Israeli software company. The investment was made by a group of investors, including Viola Ventures, Battery Ventures, Salesforce Ventures, Oak HC/FT, and Blackrock Financial Management.
In this article, we will explain the journey Datarails has taken to reach this milestone.
How datarails raised $50M
Datarails is a software-as-a-service (SaaS) platform that focuses on providing accounting and financial reporting automation solutions to mid-market and high-growth companies. The software helps customers build, update, and share consolidated statements with stakeholders directly in their web browser. It also offers custom report building options which allow customers to import data from multiple sources, automate calculations, consolidate data, and make better business decisions faster. In addition to its feature set, Datarails’ services include customer success management services and professional implementation of its product offerings.
Founded in 2018 by Mark Hensley and Weston Morris, Datarails has grown rapidly by helping companies make better use of their financial data. Since then the company has raised over $50 million in funding from Insight Venture Partners, OTB Ventures, Sigma Prime Ventures, Pitango Venture Capital, OpenView Capital Partners and Viola Growth. As a result, Datarails is proud to count some of the world’s leading venture capitalists as loyal customers.
Overview of the story
Datarails is a cloud-based analytics and business intelligence solution enabling enterprises to access, manage and analyse data from multiple sources in real-time. Founded in 2014, the Israel-based company has raised 54 million dollars since its inception. In May 2020, the company announced their largest round yet – a $50M Series C led by Lightspeed Venture Partners.
The most recent funding was part of an upround transaction after Datarails had already raised substantial sums during its first two rounds. The startup initially closed a $4 million seed round in May of 2018 that included participation from TLV Partners and Estee Lauder’s global venture capital arm, Edge Beauty Accelerator. From there, Datarails raised an additional $10 million during their Series A led by Lightspeed Venture Partners in January 2019. Their additional investment from TLV Partners and Edge Beauty Accelerator brought the total round size to $14 million.
In its latest monumental round of funding, Lightspeed took the lead once again participating for an impressive $25 million with participation also coming from Bessemer Venture Partners and various other angel investors including Eran Gilboa (former Vice President of Business Intelligence at Gett). These major investments allowed Datarails to expand their product offerings while maintaining enough operational flexibility to service customers to the highest quality across some 70 countries worldwide.
Pre-Funding
The story of how Datarails raised $50 million in funding began long before the actual investment, when the founders had a vision for modernising business intelligence. They wanted to create a solution that would automate the collection and analysis of data, and help businesses make better decisions based on this data.
To achieve this ambitious goal, they developed a platform to build and customise analytics models, process large amounts of data, and share insights with stakeholders.
This article will explore how they raised the funds they needed to take their business to the next level.
Researching the market
Before officially entering the venture capital fundraising process for their Series B round, Datarails researched the market and evaluated potential investors. In addition, they conducted multiple rounds of due diligence with potential investors, reviewing fit and potential from both sides.
It was important to Datarails that they picked an appropriate number of investors for their round so that everyone involved was brought into the conversation as soon as possible and that no single player overly dominated the discussion. The company also carefully weighed strategic versus financial investors and sought a combination of both to help propel their vision towards success.
Throughout these conversations they continued to collect feedback and learn more about investor sentiment on various topics such as expertise in sales automation and an understanding of data-driven decision making. This proactive research was key in helping them take advantage of new opportunities when they presented themselves during the fundraising process.
Establishing a customer base
Before Datarails successfully raised the funds for their development, the company had already grown out of the beginning stages of startup.
The company had established a customer base and recurring revenue from some of their earliest products. So CEO Lior Abraham started personally reaching out to investors he knew from previous gigs in Silicon Valley, giving them a peak into how much traction they were getting.
With an understanding of who else was interested in investing, Abraham then put together his pitch and formally invited venture capitalists to invest in his company. Additionally, he reached out to potential customers right after inviting the investors on board so that they had tangible proof that there was demand for the product and a reliable source of income before needing to rely completely on funding money.
The founders took full advantage of this strategy when demoing their product: they were able to motivate investors by proving that people were using the product and willing to pay premium rates for it. By demonstrating this traction upon launch, Datarails eventually raised $50M from venture capitalists and secured additional seed funding.
Building a team
Raising $50M is no easy feat, which Datarails accomplished through careful planning and strategic execution. To do so, Datarails had to build a diverse and experienced team. The leadership team was composed of both serial entrepreneurs as well as successful venture capitalists in the data industry.
This team was critical in developing an effective pitch deck, due diligence process, and suitability analysis that demonstrated to investors the potential of their product and return on investment they would expect in return. By building a strong team with extensive industry knowledge, the founders of Datarails ensured they received the appropriate funding to transform their innovative technology into a viable business.
The Funding Rounds
Datarails, a cloud based business intelligence platform, successfully raised $50M in total funding over two funding rounds. It all started when the start-up raised a $15M Series A in December 2019. The company then raised a $35M Series B round a year later.
Let’s dive deeper into the details of each round.
Series A
Datarails’s journey to raise theM started when they got accepted into Y Combinator in 2015. After a successful Demo Day, Datarails caught the attention of venture capital firms and closed $3.5M in Series A financing in 2016. This round of funding was led by Sequoia Capital and included participation from iAngels and EDI Ventures.
This funding created a larger customer base, engineering team, marketing team, and product development.
The Series A round also enabled further customer success initiatives, such as developing several customer-facing support programs to help make onboarding easier for new customers. The funding also allowed them to invest more into accelerating the development of their AI insights feature which would later become their signature product offering.
Series B
Series B refers to the second phase of venture capital financing in which an outside investor — like a venture capital firm — provides capital for a company that has already been through an initial funding from friends and family or angel investors. Series B financing occurs when a company is ready to begin scaling up its operations and is generally more expensive than the seed investment because it comes with greater expectations for growth. The typical Series B round for tech startups ranges from $5 million to $50 million.
In May 2020, data analytics startup Datarails closed a $50M Series B funding round led by IVP, with participation from returning investors Insight Partners and Blackstone. This brought the company’s total funding to over $82M, valued at around $400M. The round was intended to provide Datarails with additional resources needed to continue executing its mission of making data analytics affordable by enabling businesses of all sizes to access real-time business intelligence and power their analytical needs at scale without significant technology investments or cumbersome manual processes.
With this latest round of funding, Datarails will be able to fuel further innovation, expand its international footprint, provide more services and features for customers, as well as recruit top engineering talent.
Series C
The Series C round is the third funds-raising stage for a company. It generally follows a company’s successful completion of their Series A and Series B rounds. This financing round is used to scale up operations, extend into new markets, bring on bigger partners and acquire other businesses.
In 2019, data analytics software provider datarails Incorporated announced that it had raised $50M in a Series C funding round led by Insight Partners with participation from existing investors including Vertex Ventures, Innovation Endeavours, and OurCrowd.
During this round, datarails secured several strategic partnerships to expand its customer base across the diaspora of manufacturing, construction and retail industries in the US and Europe. With the funds from this capital infusion datarails was able to quickly build out its engineering team by hiring experienced engineers with backgrounds in big data technology and data analysis. Additionally, the funds enabled datarails to develop its customer relations program by designing an end-to-end process for sales tracking – fully mapping out all customer relations activities from initial outreach through renewal or attrition.
This Series C funding round allowed datarail’s to rapidly accelerate its global reach within enterprise customers allowing them experience transformational return on investment due to improved customer lifecycle management while providing unrivalled data analytic capabilities. It also opened up public collaborations with industry leading companies such as Microsoft Azure Digital Twins which has enabled increased participation & growth rights to access demand signals that have previously been undiscovered or unmanageable due to large size or complexity of datasets.
Post-Funding
After DatRails managed to raise $50M, their mission shifted to focus on product development, user acquisition and market expansion. With their newfound resources, DatRails had the firepower to build their product and take it to the next level.
This article will look at what they did to ensure success post-funding.
Expansion of customer base
After securing the $50 million investment, Datarails sought to expand their customer base by targeting small to midsize companies in the U.S., Europe, and Latin America. Their international focus required careful research into local markets and an understanding of the unique needs of each region.
To meet these challenges, the team used advanced analytics and business intelligence expertise to develop an innovative platform that provided extensive insights into customers’ data requirements. The platform also enabled users to quickly search for relevant company information such as Customer Relationship Management (CRM) solutions and Big Data solutions, enabling them to make smarter decisions based on real-time data feedback.
This helped organisations of all sizes maximise their opportunities while reducing risk associated with market dynamics and financial and labour costs. Additionally, by leveraging industry partnerships with providers like Oracle and Microsoft, Datarails was able to expand its customer base quickly and gain access to new opportunities throughout multiple verticals including healthcare and retail sectors.
Acquisition of new talent
Securing enough financial backing to build a successful business can be intimidating. However, when it comes to raising funds, the story of how Datarails raised $50M stands out as a rare example of great success. To fuel their rapid growth, the company had to execute a multi-staged process that included courting investors, hiring talented resources and projecting future business potential.
One of Datarail’s key strategies for achieving their financial goal was acquiring new talent. By partnering with top industry figures, they were able to tap into their network and gain access to investments from venture capitalists and angel investors alike. On top of this, David Sacks – the renowned tech executive – was instrumental in assembling a team with entrepreneurial know-how and powerful marketing chops.
Furthermore, Datarails also benefited greatly from high profile posts like Business Insider’s list of software companies set for massive growth in 2020 — putting them even further up on the radar for experienced software professionals looking for exciting opportunities. With such an impressive roll call filled with talented people, it’s no surprise that the team at Datarails were able to raise an impressive amount in funding year after year since its inception in 2014.
Expansion of product offerings
After securing $50M in Series B funding from Velo Growth, Datarails expanded its products and services, creating new opportunities for companies to access the data and insights they need. By providing comprehensive solutions covering a wide range of use cases, Datarails has quickly become a go-to for enterprise customers needing robust business intelligence capabilities.
With this additional funding, Datarails was able to develop features such as the ability to configure custom dashboards and workflows, perform data exploration and analysis, integrate with established tools and platforms like Salesforce and Microsoft Dynamics, as well as create complex charts with interactive filtering capabilities. All these additional products allowed users to extract data-driven insights from their data while maintaining GDPR compliance.
By continuously adding new features to their platform, Datarails helped companies gain a competitive advantage by better understanding their customer’s needs and slicing through the complexity of fast accessing corporate data.
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