As any CFO can attest, corporate finance is extraordinarily complicated. From preparing tax returns to financial controls, estimating cash flow and more, the finance department of any large company must often perform sophisticated analyzes with extreme attention to detail – and quickly.
Most of the time, companies outsource at least some of these financial functions to the big four accounting firms or smaller firms, but as with all consulting firms, signing contracts and getting work started can take a lot of time and effort.
It’s there that paro The Chicago-based Expert Marketplace aims to provide corporate clients with sophisticated, on-demand expertise across a range of financial functions.
The company announced today that it has raised a $10 million Series “A” venture capital round led by Mark Fernandes of Sierra Ventures. Existing investors Revolution Ventures, KGC Capital and Tom Williams also participated.
When we last connected with Paro 18 months ago, he had just raised a $5 million Series A from Clara Sieg to Revolution. The company said it is now retrospectively dubbing this round an “AA” series, as tower sizes have increased “exponentially”. Since then, the market has grown steadily, and CEO and co-founder Michael Burdick says the company is increasingly focusing on the types of customers that best fit the platform’s offerings.
“The cognitive load is huge,” Burdick told companies trying to find that talent in existing markets. “You post project descriptions, you go through all these mountains of unfiltered proposals, you have to pre-screen applicants.” This often brings CFOs straight back to incumbent accounting firms, as they are much more plug-and-play.
Paro has adopted a different tact, focusing instead on recruiting and retaining the best financial talent in its market. The company has developed and continues to improve tools to help market experts focus on the work that makes them unique rather than the drudgery that may be part of their job. We’re automating a lot of their back-office functions [and] giving them workflow automation tools to make them more productive and efficient and earn more,” Burdick said. He dubbed it the “independent operating system”.
Sieg of Revolution also noted that the quest for quality has been beneficial to Paro’s results. “Unlike consulting work, where it’s a one-time analysis and kind of lumpy engagement, you need monthly financials, you need annual tax reports, you need a audit work, and so these are really ongoing relationships,” she said. This “takes us away from some of the informal problems you’ve seen in labor markets, namely very high customer acquisition costs, relatively low participation rates and little recurring activity.”
As Paro evolves, Burdick sees an opportunity to leverage the effects of the company’s data network to build a moat around his business. “There is inherently a wealth of data at our fingertips that we mine, giving back to freelancers and clients,” he said.
Online job markets targeting business functions have grown significantly in popularity in recent years, with companies like Pilot raising major venture capital rounds. Burdick says Paro differentiates itself from accounting services like Pilot by focusing on elite financial talent, which ultimately leads to higher margins.
The company intends to use the capital to continue to develop its products and its sales force.
Update: Change from Series B to Series A and Series A to Series AA at Paro’s request.
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