Nominal emerges from stealth with $9.2m seed funding to disrupt the ERP market

Nominal emerges from stealth with $9.2m seed funding to disrupt the ERP market

Published: 02-04-2024 10:39:00 | By: Pie Kamau | hits: 646 | Tags:

Nominal, a startup that is harnessing the power of generative AI and cloud technology to bridge the gap between today’s outdated, costly Enterprise Resource Planning (ERP), systems and standard spreadsheets for accounting and financial management in mid-market businesses, has emerged from stealth with $9.2 million seed funding to disrupt the $44 billion ERP market.

The funding was led by Bling Capital and Hyperwise Ventures, with participation from Vela Partners, Incubate Fund and executives from Bill.com, Salesforce, Justworks, ServiceNow and Intel.

The $44 billion ERP market (Gartner 2023), originally revolutionized by the cloud, now grapples with outdated systems requiring costly engineering to meet modern companies’ needs. Nominal believes that generative AI is a pivotal technology, especially in light of the decline in CPA candidates and the surge of financial and accounting point solutions. Compared to existing retrieval-based assistants such as SAP Joule and Sage Copilot, Nominal takes a proactive approach, transforming business logic into automated accounting workflows.

The company plans to use the funds to accelerate its product offering, expand its market reach and increase sales and support resources in the U.S. The company primarily focuses on mid-market, multi-entity companies such as holding companies, real estate, energy and multinational technology companies in its initial go-to-market plans.

Nominal Co-founders Guy Leibovitz, CEO  and Golan Kopichinsky, VP of R&D, are seasoned entrepreneurs with a proven track record in AI and data security. They previously founded Cognigo, which was acquired by NetApp in 2019. The company also benefits from a rich core of senior technology leaders, some of whom are alumni of Israel’s top intelligence units and veterans of growth fintech companies like Riskified, Datarails and PayEm.

Nathan Shuchami, Managing Partner, Hyperwise Ventures: ''The decision to back Nominal couldn’t have been easier given the confidence we have in the team led by second-time founders Guy and Golan, as well as the early customer success achieved while in stealth. Nominal is poised for rapid mid-market growth by using AI and cloud technology to disrupt the ERP market.''

The current ERP landscape is dominated by outdated technologies, costly system integrators and lengthy customization projects. Nominal surveyed over 120 financial professionals and found that for every dollar spent on software licenses, an additional $3 is spent on system integrators. The problem is further exacerbated in multi-entity companies. The complexity of managing multiple ledgers, currencies and regulations has amplified the need for expensive customizations and convoluted spreadsheets.

Nominal is bridging this gap with an entirely new, generative AI-powered and cloud-based platform. Nominal’s shadow ledger seamlessly extends existing ERPs and general ledgers, requiring no migration and carrying no risk to current operations. Nominal’s key innovation is its generative subledgers that transform free text, documents and spreadsheets into automated workflows. The generative subledgers include an intercompany ledger for streamlined multi-entity consolidation and efficient management of cross-company transactions, a lease subledger to simplify ASC 842/IFRS 16 compliance, as well as accruals and revenue recognition subledgers. The platform also offers custom workflows, enabling businesses to tailor their financial operations to their specific needs. The generative workflows can operate in auto-pilot mode or under human supervision to ensure financial accuracy.

Moreover, through Nominal’s period-end collaboration tool and advanced reporting, businesses can free valuable resources to focus on strategic growth. Nominal incorporates generative subledgers, collaboration and real-time visibility to accelerate the period-end closing process. Nominal's Financial Data Lake aggregates data from diverse sources, enabling advanced reporting for strategic decision-making and operational efficiency.

''The ERP market is broken. Solutions today are complex, siloed and require costly engineering,'' said Leibovitz. ''Following a miserable experience at our startup and then at a Fortune 500 company, Golan and I decided to use our AI and data engineering experience to fix it. We are set to build a company that can make a real difference and deliver a solution that automates manual work and lets finance teams focus on strategy over spreadsheets.''

Nominal is deployed across hundreds of entities, managing over $1 billion in book value. The platform has proven its significant impact and efficiency in the financial management landscape. A mid-sized energy company saves more than 20 hours per week by replacing manual work with automation. Moreover, Nominal future-proofs its clients' growth with a platform that adapts to increased business demands without the necessity to expand financial teams.

Kyle Lui, General Partner, Bling Capital: ''Today's dominant ERP software companies were started around 50 years ago and built for large enterprises. These solutions are expensive and difficult to implement, particularly for smaller companies with limited time and resources. Nominal leverages AI to deliver a next generation ERP solution purpose-built for mid-market enterprises that includes out-of-the-box integrations and a modern user experience."

www.nominal.so