Our Investment in DataRails
Today we are announcing our investment in DataRails. I have been following the company’s progress since its inception a year and half ago, and I’m excited to join the ride.
DataRails is the brainchild of founder and CEO Didi Gurfinal. As an executive at Jungo and later at Cisco, Didi spent a lot of time on the manual work involved in aggregating different Excel spreadsheets, ensuring that calculations and data were correct, and dealing with limited analytics capabilities. This is how he came up with the idea for DataRails. The gist of it is this: instead of trying to come up with Excel replacements, there is a real need (and opportunity) to turn Excel itself into an enterprise-grade product.
Excel: The good, the bad and the ugly
Like many people, I love working with Excel. It’s simply the most flexible and powerful tool built for business, and with 1.5 billion users managing trillions of dollars with their spreadsheets every day, the software clearly remains the top application used by businesses worldwide.
It is estimated that 80% of financial reports and more than 70% of budget planning and forecasting are being recorded and analyzed on spreadsheets. Excel was built to provide individuals with the ability to play around with data. On a personal level, it’s a nearly flawless application. On a corporate level, however, the software is greatly limited. It’s difficult to consolidate and analyze data, and it offers limited version control, traceability, and collaboration capabilities.
A Different Approach
Over the past decade, we have seen a number of startups looking to replace Excel for specific use cases. These days, my Facebook and Twitter are full of ads for budgeting and quoting tools looking to replace Excel. All of these companies tout a modern user experience, better control and compliance, and a better flow for relevant business processes. However, the high cost of SaaS products and their implementation makes these types of solutions relevant only for high value, broad use cases. Moreover, the effort and investments many companies have already put into customizing spreadsheets over the years, along with the disruptive change to business that occurs when adopting a new SaaS platform, make switching products very costly. So, we believe Excel is not going anywhere anytime soon, and we see an opportunity to help make it an enterprise-grade application. This is exactly what DataRails is looking to do.
DataRails’ approach involves turning unstructured spreadsheets into a cloud-based, structured database, creating a single version of “truth” for all users and the ability to trace versions and changes over time. This also enables more advanced data governance capabilities, like access management and usage tracking. Building this database is a pretty complex task that requires a deep understanding of the spreadsheet’s content and structure, including cell data types, formulas and logic.
We have spoken to a large enterprise that consists of many smaller, acquired companies. The customer mentioned that they don’t try to consolidate all of the companies into using the same financial reporting system, and for them Excel works great for all except the holding company level and it is their policy to use Excel for all the intermediate levels.
Early, Promising Traction
DataRails launched its first version late last year and at the beginning of this year did the product reach the maturity required by users, which has led to fast-paced growth over recent months. We are very excited by the feedback we received from customers during our DD. They all said they were absolutely thrilled to have finally found a solution allowing them to keep using their beloved Excel with the peace of mind and functionality provided by the DataRails product.
Different customers love different features of the product. For some, being able to track changes and having the peace of mind of knowing their data is being constantly validated is worth the cost. Others have found great ROI from reducing the manual work that goes into consolidating data from different Excel sheets. One customer even used DataRails to replace an analytics suite that cost five times more but was too complex for most users. This range of use cases supports our belief that DataRails’ platform is relevant for nearly every company using Excel. The team decided to initially focus on advanced heavy users (e.g., finance teams), and adopted an effective “land and expand” strategy where they initially sell to departments in medium or large corporations and then expand to adjacent teams as well as other areas within the organization.
The Right Team for the Job
Clearly, what DataRails is seeking to achieve is no small feat. To build DataRails, Didi partnered with two strong cofounders: Eyal Cohen, who was previously one of the founders at WalkMe, where he oversaw the product, and Oded Har Tal, a veteran R&D Manager and expert Data Scientist. The company was also able to attract great executives with the additions of Ted Shapiro, VP Sales, and Lori Brigg, VP Customer Success, who in their previous roles helped their companies grow to over 10M ARR.
The Road Ahead
These are exciting times for DataRails. It seems that the number of potential customers is endless, and we are hearing of new use cases every week. In fact, the number of new use cases regularly surfacing might even present a challenge to the company’s ability to focus on a few killer use cases and create a no-brainer product that is easy to sell and easy to implement. But I have faith that the team at DataRails will be able to do just that, and I am looking forward to working with Didi, Eyal , Oded and the team to do just that.
