ScaleFactor Crunchbase Company Profile & Funding

“There’s a lot of them, and they need a lot of help,” he told Crunchbase News. “And they don’t traditionally have access to resources that bigger companies do. Ultimately, we want to provide more than just accounting and finance assistance. In June 2020 the fintech startup ScaleFactor announced that it is winding down.

Scale factor is defined as the number or the conversion factor which is used to change the size of a figure without changing its shape. The scale factor can be calculated if the dimensions of the original figure and the dimensions of the dilated (increased or decreased) figure are known. For example, a rectangle has a length of 5 units and a width of 2 units. Now, if we increase the size of this rectangle by a scale factor of 2, the sides will become 10 units and 4 units, respectively. Hence, we can use the scale factor to get the dimensions of the changed figures. The company forwent Texas-based investors, turning to mostly West Coast-based money for its Series C. Coatue Management led this latest round (its exits include Uber, Lending Club, Reddit and Lyft).

ScaleFactor Raises Third Round ($60M) In 13 Months After 700% ARR Growth In 2018

scalefactor’s 100 employees were told during a town hall Tuesday that half of them would be laid off immediately, and that by the end of August there will be about 10 employees to help wind down the company. Departing employees will receive 12 weeks severance and healthcare until the end of 2020. As ScaleFactor scrambled to add new customers, existing customers were demanding refunds. Even as doubts about its product emerged, ScaleFactor scored a term sheet for a $60 million funding round at the start of June 2019. Coatue Management, a large technology investor overseeing $16 billion in assets, led the new funding round, joined by Bessemer, Canaan and others. In the end, the only tool with a true automation component, the potential investor found and employees confirmed, was an internal workflow engine, or “a guided to-do list” for ScaleFactor employees that organized tasks required to close a customer’s books.

Another SaaS company in the financial technology space, Gusto, also recently raised a $200 million Series D for its self-described “people platform,” which addresses a number of HR-related functions. At the end of the day, Kurt Rathmann explained to Forbes last month, customers were craving a person, rather than a computer to do their accounting. “We really thought we could automate the entire back office of a small business,” Rathmann said. Covid-19 swept the United States the following month, and existing customers weren’t buying in; Robert and Cornelia Stang balked after being told their contract would jump from $500-a-month to $1,700. In the spring, investors discussed ScaleFactor’s future before deciding to shutter operations, according to a person with knowledge of the discussions.

Scale Factor Examples

Some customers were offered discounts in exchange for a reference; others were signed on without billing information, former sales employees say. At the end of the month, the sales team was told the target had been met. The company celebrated by throwing them a party at an arts and crafts factory in East Austin, where employees took photos with oversized bonus checks. Scaling down means that a larger figure is reduced to a smaller one. Even in this case, the scale factor can be calculated by a formula, which is another version of the basic formula. This investor behavior might seem naïve to onlookers, but VC funds don’t spend money the same way as an individual does.

• ScaleFactor’s closure is yet another symptom of the pandemic’s varying effect on venture-backed startups.
• In physical cosmology, the dark-energy-dominated era is proposed as the last of the three phases of the known universe, the other two being the radiation-dominated era and the matter-dominated era.
• It is used when we need to increase the size of a 2D shape, such as circle, triangle, square, rectangle, etc.
• Scaling up means that a smaller figure is enlarged to a bigger one.
• It is used to draw the enlarged or reduced shape of any given figure and to find the missing length, area, or volume of an enlarged or reduced figure.

The company raised $103M based on the promise that they were going to revolutionize accounting for small and medium businesses by automating their bookkeeping. During due diligence, one of these potential investors learned that ScaleFactor had a customer service team who they were told functioned as “account managers.” Further inquiry revealed the employees were accountants. “So the software might look automated, but they actually had all these people on the backend,” the potential investor said.