Image credit: David Garb Photography.
High interest rates and financial pressures make it more important than ever for finance teams to better manage 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 round of funding led by Team8, with participation from TLV Partners.
Startups have had some luck finding time after the CFO stack to streamline processes and work on strategic tasks. The demise of SVB created tailwinds for the cash management category, which includes players such as Ambit, Kariba, Statement and Westo.
Unlike some of them, Panax focuses on medium-sized 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 kind of large treasury departments that legacy solutions cater to.
Target aside, Panax also hopes to differentiate itself in its offering, not just by adding investment accounts and lines of credit to its scope.
Pinax CEO Noam Mills told TechCrunch that while cash flow visualization is helpful, Pinax wants to go beyond providing a dashboard. She thinks it's important to use data to help her clients “understand what's really important, influence those decisions and help manage them. [their treasury]”
This value proposition seems to resonate with Panax's early adopters, including companies like public beauty-focused company Oddity, and for whom cash management automation is a time and money saver.
Taking 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 go-to-market approach and build an even stronger AI and data team. While he has plenty of data for that, Mills said.
AI is already playing an important role at Panax: it helps the startup make sense of all the financial data it has collected, but also identify insights and forecast cash flow. For Mills, surfacing action items is where AI can really help. “Often there is no formal finance department. […] So we see AI as a great enabler to be proactive and raise the right flag for the client.
Image credit: Panax
The clients Panax seeks are companies with complex treasury management needs. Generally, they operate in several locations across currencies. Foreign exchange is one aspect that could help Panax improve, and it could do additional work for the company beyond its SaaS model, which is priced based on the complexity of each client's operations.
There are many stakeholders who are hoping to gain a share by helping companies improve their cash flow. For example, they can apply for loans and request working capital or lines of credit from their banking app or from their accounting software interface. But Panax has one card to play as a one-stop treasury management dashboard that integrates recommendations and projections.
The goal of Panax, Mills said, is that finance teams won't have to go anywhere else to execute the decisions they must make. “[That] If we bring them insights, they can move more money into interest-bearing accounts. Embedding this functionality within our platform is something that we see as really strongly tied to our value proposition, and it's also something that we see in many different use cases with money movement. I am preparing.
Mills' understanding of these needs comes from her experience in private equity, which she shares with Chief Business Officer and Co-Founder Niv Yaar. But her personal background is quite unique: prior to her roles in PE and corporate finance, she was an Olympic fencer for Israel, winning several titles in her home country.
Asked what his athlete background and CEO role have in common, he highlighted similar psychological requirements, such as persistence and the ability to deal with uncertainty. But fencing is an individual sport, while running a company is “more of a team sport.”
After Series A, Panax will expand its NYC office and Yaar will relocate there, but its R&D will remain in Israel. Similarly, Panax CTO and third co-founder, Sefi Itzkovich, who worked on machine learning at Facebook after the company where he previously worked as CTO, Otonomo, will go public through a SPAC.
“Everywhere there is competition for talent. [but] “We have deep roots in the R&D community in Israel through our CTO and founding team, which gives us an edge in competing for talent,” Mills said.
Mills expects network effects to also play a role in New York City, where Team 8 has an office. But he and his co-founders chose the city because of the additional overlap with Israel's time zone compared to the Bay Area, and also because of its relevance for fintech. It's centered more in New York and the East Coast, Mills said.