Finaloop Inc., the e-commerce-oriented accounting platform, said today it has closed on $35 million in early-stage funding.

Today’s Series A round was led by Lightspeed Venture Partners and saw participation from new investors Vesey Ventures and Commerce Ventures, plus new backers Accel and Aleph. It brings the startup’s total amount raised to date to $55 million.

Founded in 2020 with offices in New York City and Tel Aviv, Finaloop is aiming to disrupt the e-commerce business accounting industry and transform the way sellers and retailers organize their finances with its automated bookkeeping and inventory cost management tools.

The startup says the e-commerce industry has grown enormously over the past few years and is expected to deliver more than $6 trillion in global sales this year, citing data from eMarketer. The trend is being powered by the ubiquity of smartphones and the popularity of marketplaces such as Amazon and eBay, plus social media platforms like Facebook and TikTok, which also enable their users to sell products and services online.

But selling online is a complex business, and though there’s a glut of platforms such as Shopify that enable anyone to create an online store with ease, other aspects have been left behind. Notably, the accounting process for online retailers has been neglected, with most smaller businesses and individual sellers using tools such as Quickbooks, Xero and NetSuite.

The problem is that these accounting tools are old, having been launched more than two decades ago, said Finaloop founder and Chief Executive Lioran Pinchevski.

“The entire e-commerce industry is built on an advanced technological stack with players like Shopify, Amazon, Gusto, Stripe and others, but the accounting and bookkeeping solutions used by these companies were light-years behind every other tool in their arsenal,” he explained.

Pinchevski said he experienced this himself when he founded his own direct-to-consumer brand prior to launching Finaloop. “The result was inventory mismanagement, incorrect pricing decisions and completely unreliable financial reporting,” he explained.

Finaloop aims to transform e-commerce accounting with its highly automated bookkeeping platform that runs in the background, keeping track of three separate business functions. It incorporates a business ledger that records all transactions, traditional bookkeeping tools to itemize those transactions, and inventory spreadsheets that allow sellers to keep track of what’s being sold and what’s in stock, and also make projections on future sales. Through this, they can ensure they never run out of stock of their most popular products.

The startup claims to be the first artificial intelligence-powered accounting tool for direct-to-consumer brands that sell on platforms such as Amazon, Shopify, Walmart and other online stores, as well as wholesalers and multichannel retailers. Its platform integrates with just about every store a company might be using to sell its products, as well as the payment processing, shipping and other services they rely on. Sitting at the heart of its platform is its AI reconciliation engine Rico, which automates the categorization of millions of transactions.

Sellers that use Finaloop benefit from being able to make smarter, data-driven decisions by removing financial blind spots, Pinchevski said. As a result, they can grow faster, improve their cash flow and increase the accuracy of their inventory planning operations.

Finaloop, which is priced at $65 per month, has been successful, growing its customer base by more than 400% in the last 12 months. It claims to be working with “thousands of brands” and manages more than $13 billion in gross merchandise value on its platform.

One of Finaloop’s first customers was Duradry Inc., which sells personal hygiene products. “The magic of Finaloop is that it simplifies the financial process and gives me trust in my numbers,” said Duradry CEO Jack Benzaquen. “Having this visibility is key, and it never existed before.”

Lightspeed Venture Partners’ Tal Morgenstern said he’s backing Finaloop thanks to its potential to shake up an industry that hasn’t seen any material change in over 30 years. “They are at the forefront of reshaping accounting and bookkeeping for e-commerce by solving its biggest pain points,” he said.

Finaloop said it will use the money from today’s round to invest in its AI-driven e-commerce automation and inventory cost management tools and expand its go-to-market operations.

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