Even just a few years ago, FinOps — a collection of best practices to manage the costs of cloud computing — wasn’t something that was top of mind for a lot of businesses. Since then, though, businesses have started tightening their purses. Today, FinOps is pretty much a standard discipline, and there are dozens of startups that aim to help businesses find the right balance between productivity and spend.
One of the more established companies in this space is Finout, which is announcing a $40 million Series C funding round Wednesday. That’s on top of a $26 million Series B round the company announced last March (for a total of $85 million to date). While raising two funding rounds in quick succession was a staple of the industry during the boom of 2021, it’s quite unusual to see this today. But as Finout co-founder and CEO Roi Ravhon told me, the company didn’t just take the money and put it in the bank. Instead it capitalized on a unique opportunity, especially after VMware’s Tanzu Cloudhealth and Kubecost were acquired by Broadcom and IBM in the last two years.
“The past eight months have been phenomenal for Finout,” he told me when I asked him about how this round came about. “The market dynamics, with two of our biggest competitors being acquired by Broadcom and IBM, means that most companies don’t have an option. You’re not going to move from Broadcom to IBM. You’re not going to move from IBM to Broadcom. You’re going to the next tier, and this just gives us an amazing and very unique opportunity right now in the market. We are the enterprise-ready tool that can service those businesses. We’re the right tool at the right time, and we’re getting the trust of lots of U.S. enterprise that are in the market to buy new cloud cost management solutions.”
The Tel Aviv- and New York-based cloud cost management company counts the likes of SiriusXM, Lyft, The New York Times, Choice Hotels, Wiz, Tenable, and Alchemy among its customers.
Early iterations of cloud cost management, Ravhon said, were built for a world where only AWS existed. Then you start adding in more cloud platforms, Kubernetes, data warehouses, and dozens and dozens of SaaS services. Suddenly the existing offerings start breaking, and it becomes almost impossible for enterprises to figure out where exactly their budgets are being spent.
“We talked to so many companies that were struggling with the exact same problems as we had, and we understood that we just needed to build the tools that we wanted to use,” Ravhon explained when I asked him how he came to start Finout four years ago. “The market was ripe for something new, and this is why we decided to start Finout.”
He noted that the company focuses on three pillars: analytics (to help companies figure out what they are spending on); predictions (because it remains hard for engineering and finance teams to understand how much they will spend in the future); and democratizing FinOps in general, since it’s hard to get engineers to actually care about how much they are spending on cloud resources.
Regarding this third pillar, Ravhon also said that it’s important to note that FinOps is not just about cost cutting. “We’re a new system of record in those organization that really helps to drive the conversation around cost management and how it directly correlates to anything that they’re doing.”
Using the new funding, Finout plans to double its engineering team in Tel Aviv and expand its go-to-market team, too.
The new round was led by Insight Partners, with participation from Pitango, Team8, Red Dot Capital, and Maor Investments. The company says its valuation doubled from the Series B round, though it did not disclose its valuation.
