UPDATED 08:00 EDT / MAY 23 2024


Cloud cost optimization startup Finout reels in $26.3M in Series B funding

Finout Ltd., the financial operations startup helping companies to manage, allocate and reduce cloud spending across any cloud infrastructure platform, has raised $26.3 million in a new funding round, it announced today.

Leading the Series B investment was Red Dot Capital, which was joined by new investor Maor Investments and existing backers Team8, Pitango and Jibe Ventures. The round brings Finout’s total amount raised to $45 million.

Founded in 2021, Finout is one of several startups trying to make waves in the FinOps market, which is growing in importance as enterprises continue to eat up cloud computing resources amid a scramble to integrate new technologies such as artificial intelligence.

These days, large enterprises often spend millions of dollars per year on cloud infrastructure providers to support a range of information technology systems and business applications. Gartner Inc. estimates that global public cloud service spending will grow by more than 20%, to $678.8 billion this year, highlighting the growing importance of cloud resources.

These rising cloud computing costs have created an urgent need for enterprises to manage and allocate cloud costs in order to optimize spending. By doing this, companies can potentially save thousands, if not millions of dollars per year. Yet doing so is tricky, as managing cloud costs means undertaking a detailed analysis of numerous bills from multiple cloud providers.

This is where Finout comes in, with a comprehensive FinOps platform that aims to help companies better monitor and manage their expenditure and find ways to reduce their spending. Finout’s MegaBill consolidates spending from infrastructure services, data warehouses, content delivery networks, middleware and more into a single bill.

By doing this, it becomes much easier for companies to figure out ways to reduce their cloud spending, such as by identifying money that’s wasted on unallocated resources or unnecessary services. Alternatively, it can help companies to identify areas where increased spending on a particular service might increase their revenues, driving profitability.

Finout’s suite of FinOps tools includes the AWS Cost Optimizer, which the company claims can help Amazon Web Services users reduce their bills by up to 60%. It does this by continuously evaluating how customers use their AWS resources, identifying opportunities where they can take advantage of lower-cost AWS Reserved Instances whenever possible, for example.

Additionally, Finout also caters to artificial intelligence workloads, optimizing spending on AI services such as AWS’s SageMaker, Comprehend, Lex and Rekognition, and Google Cloud’s Vertex AI and Dialogflow, as well as the infrastructure that underpins each AI model.

Constellation Research Inc. analyst Holger Mueller said Finout’s offering looks fairly compelling because cloud spending remains something of an enigma to most finance teams, due to the way the industry keeps evolving with newer, more complex service offerings and business models.

“By now, most chief financial officers have realized that they’ll never truly get on top of their organization’s cloud spending, especially with generative AI being added to the mix, adding another dimension of complexity,” he said. “The help needs to come from outside, from specialized vendors, and today’s funding round means Finout is one of the most promising ones, with an offering that’s surely going to get better.”

Finout co-founder and Chief Executive Roi Ravhon said dozens of large enterprises have embraced the company’s FinOps platform because of the challenges involved in trying to build their own cost monitoring tools. He reeled off a list of well-known organizations using its cost optimization tools, including the New York Times, Lyft Inc., Choice Hotels International Inc., Wiz Inc., Tenable Inc. and AppsFlyer Ltd.

“Building an in-house solution isn’t practical because of the work, complexity and dynamic nature of supporting multiple cloud environments,” the CEO said. “We see many enterprises turning to Finout to manage their data layer, allowing them to focus on their own FinOps logic, seamless integration with existing systems, and supporting the implementation of FinOps culture at scale.”

Tenable’s senior manager of cloud FinOps, Vijay Kurra, said Finout’s tools helped his team to identify cost inefficiencies with much greater precision. “This level of detail has been instrumental in enabling our development teams to manage their cloud resource usage more efficiently,” he said.

Finout’s expanding customer base helped to drive a 900% revenue increase in 2023, followed by a 300% gain since the beginning of this year, it said.

According to Red Dot Capital’s Barak Salomon, FinOps is becoming fundamental to modern enterprises. “They require modern solutions as cloud consumption increases both in volume and complexity,” he said.

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