Why we invested in Trezy
Trezy has raised €3m led by Playfair and Seedcamp to expand its AI-driven predictive cash flow management platform to the UK. Kima Ventures and Discovery Ventures also contributed to the round.
How it all started
Trezy and its founders Quentin Lacointa (CEO) and Pierre Houdyer (CTO) were referred to João in his second month at Playfair by friends at Balderton and Project A. We knew the process was advanced and they already had a lead in Seedcamp at this point. Nevertheless, we completed our usual in-depth process in a week from first call to IC, the rest is history.
The problem with financial reporting and forecasting if you’re an SMB
It is surprisingly difficult for small and medium sized business (SMB) owners to know what’s going on under their company’s hood, and, subsequently, decide what needs to change. Trezy believes this stems from a lack of distinction between strategic financial reporting that informs decision-making, and compliance-focussed accounting.
Accountants today simply don’t have the capacity to give SMB owners real-time insights into their financial performance, and stay on top of all their compliance related tasks. They are busy with bookkeeping, preparing financial statements, submitting end-of-year statements to HMRC, compliance, and filing tax returns — but are also expected to be financial advisors.
There’s also an issue of timing.
In the past, making business decisions based on last year’s accounts worked for SMBs, but now they need to react more quickly. This is exacerbated by macroeconomic instability, inflation, supply chain issues, and increasingly complex business models. However, a lag of months, or even a year, remains between the ordinary course of business and the company’s official accounts being finalised.
These problems particularly affect companies that have recently seen rapid technological and market changes. Many of these businesses have a high reliance on cash and a high volume of transactions. They face tight cash positions but have limited insight into how decisions impact cashflow.
The owners of these businesses are not trained in accounting, and typically rely on their accountant for insights into the financial performance of their business, if at all. There are a number of tools that recognize transactions, but none can make projections well, or simply. Accounting tools and Excel require vast amounts of manual labour and financial knowledge. We spoke to over a dozen current and potential users and we’re shocked at the number that still manually categorise transactions using Google Sheets, but even more that are using a supposed new-generation solution without the strategic results they really need.
To summarise: Cashflow forecasting is difficult and slow for SMBs. Current accounting tools don’t allow for real-time visibility, and accountants are often an unnecessary translation middleman.
Trezy’s solution
Trezy believes accountants should focus on accounting and compliance, while business leaders should focus on financial decision-making. They have built a real-time accounting solution that helps business owners do this, and leave behind attempts to forecast finances using Google Sheets and Excel, or long waits for end of year reports.
Trazy’s simple financial forecasting and cashflow management tool provides real-time financial reporting, predominantly through smart AI-based classification of bank transactions, receipts and invoices. It is deliberately engineered to be a unique balance of detail and abstraction, combining bank transaction data with accounting data to build a winning product. It is based on 14 million accounting entries and 2 million cash transactions. “Scenario mode” allows business owners to project cash flow into the future according to income forecasts.
The more information businesses give Trezy, the more accurate their estimations will be. Importing past accounting entries leads to a more realistic viewpoint of the business situation. The tools businesses use to prepare accounting or invoice can be connected to the system so the algorithm keeps learning and adapting.
Playfair’s thesis
The world of SME financial reporting is rapidly evolving, but there is still a gap for a tool that provides SMBs with accessible, real-time decision-making. Trezy is unique in combining bank transaction data and accounting data, and the data network effects built from combining these.
The product is already live in 32 countries across Europe and aims to have 10,000 SME customers by the end of 2024, despite launching less than two years ago. It is designed for strategic decision making (and not end of year reporting), so does not need to be compliant with local accounting practices.
Users are already reporting tangible impacts.
One business owner using Trezy realised that their current ratio of food costs as a % of turnover was materially different from their last financial statements as a result of recent changes in supply chain and inflation.
Another realised far earlier than they would have that they were going to barely break even that year. “I actually hired faster than I expected and I had to slow down and keep growing my customer base,” said one CEO. “Without Trezy, I would have continued until the annual statement from my accountant in March 2022. I managed to take the decision five months before that.”
The team
We’re looking forward to working with Trezy’s impressive founders, who are driven by a culture of execution. Quentin Lacointa (CEO) and Pierre Houdyer (CTO) founded the company in June 2021 after leaving their previous roles at GrowthTribe.
Quentin is a self-professed obsessive over execution, which has been evidenced by his thinking around GTM and the product’s traction to date. He has founder and early scaling experience from his previous startup Growth Tribe, which he scaled to €6m in revenue and 120 FTE. We were impressed by his intelligence, iterative approach and appetite for continuous learning.
Pierre brings the academic, AI, big data and leadership credentials. He has a masters in computer science, worked for the CNRS on data mining and ML and was a lead developer and Global IT Director at GrowthTribe.
What’s next
We’re excited about the AI-powered “graph to text technology” the team is building. It will expand their relevant addressable market to include the 70% of currently inaccessible “financially illiterate or uncomfortable” customers by translating financial data into an easy to understand insight and suggested action. This would be written out like an accountants’ end of year report, rather than in tabular format, and could be delivered more by Whatsapp or similar. We’re excited to see how Trezy can leverage generative AI technology to further automate the administrative tasks of data analysis and the presentation of insights, to let business owners go from business questions to meaningful action more quickly.
. . .
If you’re an SME business owner looking for a simple-to-use cash management tool that provides the business insights you need without all the admin, you can reach out to the Trezy team directly here: hello@trezy.io.
If you’re a founder at the very earliest stages of building your company, I’d love to meet to debate and brainstorm your vision for the world. You can find me on LinkedIn here or pitch the wider team at Playfair here.
You can follow the Playfair team on LinkedIn, Twitter, Forbes, Vimeo and here on Medium.
