High interest rates and financial pressures make it more important than ever for funding groups to get a better handle on their cash flow, and many startups are hoping to help.
Two-year-old Israeli startup Panax is one, and it just raised a $10 million Series A funding round led by Team8, with participation from TLV Partners.
Startups have had little luck following the CFO stack, streamlining processes and freeing up time to work on strategic tasks. SVB’s collapse created headwinds for the cash management class, which includes players such as Embat, KiribaDeclaration and Vesto.
Unlike some of them, Panax focuses on medium and large companies in traditional industries such as manufacturing, logistics and real estate. While they need more than startups, they don’t always have the type of large fund departments that legacy solutions serve.
In addition to the target, Panax also hopes to differentiate itself in its offering, and not just by including investment accounts and lines of credit in its purview.
While cash flow visualization is useful, Panax wants to go further than just providing a dashboard, Panax CEO Noam Mills told TechCrunch. He believes that helping their customers requires “using data to understand what’s really important, influence those decisions and help them manage [their treasury].”
That value proposition seems to be resonating with Panax’s early adopters, which include companies like publicly traded beauty company Oddity, for whom automating cash management saves time and money.
Bringing its total funding to $15.5 million following a $5.5 million seed round led by TLV Partners, this new round will help Panax scale its market reach and build a stronger team of artificial intelligence and data now that it has enough data to do so. Mills said.
Artificial intelligence already plays an important role at Panax: It helps the startup make sense of all the financial data it collects, but also to identify insights and predict cash flows. For Mills, showing action items is where AI can really help. “Often there is no official finance ministry […] So we see AI as a great tool to be proactive and raise the right flags for the customer.”
Image Credits: Panax
The customers Panax seeks are companies with complex inventory management needs. typically, they operate in various currency locations. Foreign exchange is one aspect that Panax can help optimize, and this could lead to additional momentum for the company in addition to the SaaS model, which is priced based on the complexity of each customer’s operations.
There are many stakeholders hoping to get a stake in helping companies optimize their cash flow. For example, they could apply for loans and request working capital or lines of credit from their banking app or from their accounting software interface. However, Panax has a card to play as a single fund management dashboard that integrates recommendations and forecasts.
Panax’s goal, Mills said, is that finance teams won’t have to go anywhere else to execute the decisions they need to make. “[That] If we bring them the information, they can move more cash into interest-bearing accounts. Integrating that functionality into our platform is something that we feel is really closely tied to our value proposition, and those are also things that we’re developing across a lot of different use cases with money movements.”
Mills’ understanding of these needs comes from her experience in private equity, which she shares with chief operating officer and co-founder Niv Yaar. But her personal background is quite unique: Prior to her roles in PE and corporate finance, she was a Olympic champion for Israeland won several titles in her home country.
Asked what the athlete’s past and the role of CEO have in common, she highlighted similar psychological requirements, such as persistence and the ability to deal with uncertainty. But fencing is an individual sport, when running a company is “more like a team sport”.
After the Series A round, Panax will expand its office in New York and Yaar will move there, but its R&D will remain in Israel. So will Panax CTO and third co-founder, Sefi Itzkovich, who worked on machine learning at Facebook after the company where he previously rose to CTO, Otonomo, went public through a SPAC.
“There is competition for talent everywhere [but] the deep roots we have in the R&D community in Israel through our CTO and founding team gives us somewhat of an edge competing for talent,” said Mills.
Mills expects network effects to also play a role in New York, where Team8 has an office. But she and her co-founders also chose the city because of the additional overlap with Israel’s time zone compared to the Bay Area and because of its relevance to fintech. “The center for that is more in New York and the East Coast,” Mills said.
