Lightspeed Venture Partners Leads $4.3 Million Seed Investment in Automated Financial Reporting Fintech Company InScope
The Importance of Accurate Financial Reporting
The financial reporting and auditing process is not often considered a sexy topic, but it can have dire consequences for companies when errors are made. Just ask Lyft, which experienced a major mistake in its financial report earlier this year. According to Mary Antony, co-founder of InScope, "It really looks like a sudoku puzzle that you have to do with trial-and-error to get right." This analogy highlights the complexity and time-consuming nature of preparing accurate financial statements.
The Problem with Manual Financial Reporting
Antony and her co-founder, Kelsey Gootnick, both come from accounting backgrounds and met while working at Flexport in 2018. They saw firsthand how difficult it was for companies to put together financial statements and disclosures, which can take weeks or even months to compile. This process is not only time-consuming but also prone to errors that can have severe consequences for companies if presented incorrectly.
Introducing InScope: Revolutionizing Financial Reporting and Auditing
In 2023, Antony and Gootnick decided to leverage their expertise in accounting to create a solution that would automate the financial reporting and auditing process. They launched San Francisco-based InScope, which uses machine learning and large language models to provide efficient and accurate financial reporting and auditing processes for mid-market and enterprise companies.
The Benefits of InScope’s Automated Financial Reporting
InScope’s first iteration of the product included automating GAAP (generally accepted accounting principles) and non-GAAP reporting, including cash flow statements. Antony explained that "Cash flow statements are one of the most important metrics for a company, so they shouldn’t be a sudoku puzzle, or a puzzle in general." InScope makes it possible for customers to have effortless, accurate, and reliable financial statements every time.
Expanding Features and Competitors
In addition to cash flow statements, InScope will release a feature later this year that helps customers draft annual and quarterly financial reports. This feature will further streamline the financial reporting process and provide companies with more accurate and up-to-date financial information.
While InScope has competitors in the finance and audit software space, such as Workiva, Gootnick notes that their product offering is focused on private companies. InScope’s closest competitor today is Workiva, which provides finance and audit software to public companies. However, InScope sees itself as a complementary solution to legacy professional service firms.
Early Success and Future Growth
InScope has five early customers and is in the process of signing an additional six. The company is generating revenue currently and aims to grow both 10x in customers and revenue by the end of the year. This growth attracted venture capital investors, who injected $4.3 million in seed capital into InScope.
Conclusion
The evolution of financial reporting and auditing is an exciting development in the industry. With the launch of InScope, companies can now benefit from automated financial reporting and auditing processes that are both efficient and accurate. As InScope continues to grow and expand its features, it’s clear that this innovative solution will revolutionize the way companies approach financial reporting and auditing.
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