When salesforce.com invested in FinancialForce a few years ago, there was keen interest in how this would help the company grow. There’s never been much clarity around those numbers since the parent company of FinancialForce, Unit4, doesn’t break out the individual numbers of operating divisions. That is a bit clearer now since in its last reporting period, Unit4 gave the following information:
FinancialForce.com, the cloud applications company, today announced record results for calendar year 2012. Within one year, FinancialForce.com increased annual revenue run rate by more than 90 percent, from 9 million in 2011 to 17 million in 2012, significantly expanding their customer base in Accounting, Professional Services, Billing and Media. Additionally, the number of customers using both Accounting and Professional Services Automation (PSA) grew by 120%. Finally, 2012 also saw the expansion of FinancialForce.com’s enterprise customer base as average contract value rose by a significant percentage.
90% of the company’s growth is due to larger deal sizes.
The company also expanded its staff globally by 60%, across the United States, United Kingdom and Spain. As cloud spending continues to be a top priority for CFOs and CIOs, FinancialForce.com is poised for aggressive growth again in 2013 and projects more than 100 new hires across the globe to keep up with its rate of growth.
Update – apparently it was an incorrect statement in the Financial Force statement about 90% of growth coming from larger deal sizes. Something to do with misinterpreted statistics.
The mid market is one that is very underserved by cloud accounting/financial vendors – NetSuite used to play in this space but is rapidly moving up the food chain leaving FinancialForce and Intacct to scrap over the mid sized customer base. These results are indication that there is an appetite in the marketplace for midsized organization to move to the cloud It’s also interesting to see that even FinancialForce is seeing a move to larger organizations as larger deal-sizes become more prevalent.
As expected, FinancialForce is enjoying the network effects of having customers using both financial and professional services automation products – and I’d expect this trend to continue – I’d also expect the company to add additional services that further increase the network effects of discrete, but closely integrated solutions.