Place Technology

Growth Stage

The finance platform for live collaborative forecasting and planning.

Analytics

Raised to Date: Raised: $834,795

Aggregate Commitments $

Platform

Wefunder

Start Date

06/24/2021

Close Date

10/22/2021

Min. Goal

$50,000

Max. Goal

$1,070,000

Min. Investment

$100

Security Type

Equity - Preferred

Funding Type

RegCF

Series

Series A

Pre-Money Valuation

$13,400,000

Rolling Commitments $

Status

Active

Reporting Date

09/18/2021

Days Remaining

34

% of Min. Goal

1,670%

% of Max. Goal

78%

Likelihood of Max
likely
Avg. Daily Raise

$9,707

Momentum
hot
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Location

Austin, Texas

Industry

Financial & Insurance Products & Services

Tech Sector

Fintech

Distribution Model

B2B

Margin

High

Capital Intensity

High

Business Type

Growth

Place Technology, with a pre-money valuation of $13.4 million, is raising funds on Wefunder. The company has developed a finance platform, PlaceCPM, to connect the elements of a company’s current and future financial data and provide tools for efficient financial forecasting, reporting, and workforce planning. Brandon Metcalf and Kabe Vanderbaan founded Place Technology in August 2018. The proceeds of the current crowdfunding round, with a minimum goal of $50,000 and a maximum goal of $570,911, will be used towards marketing and hiring more account executives. Place Technology reported a 405% license revenue growth from April 2020 to March 2021. It is the only financial forecasting product built on Salesforce.com and is the third highest-rated forecasting software on the site G2.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$261,312

$237,837

COGS

$117,050

$23,900

Tax

$93,433

$47,681

 

 

Net Income

$-2,530,855

$-1,431,843

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$265,815

$1,340,689

Accounts Receivable

$53,166

$33,025

Total Assets

$431,602

$1,398,674

Short-Term Debt

$467,969

$164,099

Long-Term Debt

$244,865

$0

Total Liabilities

$712,834

$164,099

Financials as of: 06/24/2021
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Ratings

Analyst Report

Synopsis

The internet has revolutionized many aspects of business, including the speed at which information is shared. The use of financial data is one such aspect. Financial forecasts and metrics are key tools used by businesses to plan future operations and assess current performance. The communication of financial data is near-instant, thanks to technologies like email and digital messaging. However, financial data must first be gathered and collected to be used effectively — a problem which has not been fully solved by the internet. 

One company that wishes to change this narrative is Place Technology. The company provides a service called PlaceCPM, which connects the flow of data across the finance lifecycle of the organization. It achieves this by utilizing bi-directional integrations with Salesforce. With PlaceCPM, users can access all financial data from a single source in virtually real time. These same customers are able to use the tools provided by the company to allow for collaborative financial forecasting, reporting, and workforce planning across the organization. This is all made possible through the dashboards and other features the Place Technology’s platform enables.

Place Technology operates off a subscription model. Subscriptions start at $250 per month and permit up to two contributors on the service. Each additional contributor costs $125 per month. The company also has a service for five contributors priced at $750 per month and for 10 at $1,750. Though not disclosed, it is likely that other sources of revenue will become apparent over time. That said, however, that will only come as the company is able to afford further buildouts.

Place Technology’s current Wefunder raise has been rated a Neutral Deal by the KingsCrowd investment team.

Price

Place Technology is currently raising at a $13.4 million pre-money valuation. In exchange, investors  will receive Series Seed-2 Preferred Stock. When compared to the company’s recent revenue, this valuation is unjustified. Place Technology generated just over $260,000 last year, resulting in an overly high revenue-to-valuation multiple of 51 times. However, Place Technology is a growth stage company. A $13.4 million valuation is very low in comparison to other growth stage startups currently raising capital online. This factor pushes Place Technology’s price score to being above average.

Market

According to one source, the financial planning software market was worth $1.46 billion in 2020. The market is expected to grow at a rate of 13.2% annually, eventually reaching $3.08 billion in 2026. Though this category is small, it is just one of multiple that Place Technology participates in. Another market to consider is the global accounting software market, which was worth $12.01 billion in 2020. With a growth rate of 8.5% per annum, it should climb to $19.59 billion by 2026. 

Place Technology’s market opportunity can be examined in another, more specific way. At present, it is focused on servicing the roughly 175,000 businesses on Salesforce that have between 25 and 1,000 employees. Depending on pricing, this could result in annual revenue opportunities for the company of between $525 million and $3.68 billion per year. 

Overall, the market opportunity is not particularly large at this time, though it does look to be growing at a fair pace. Balancing these factors together, Place Technology scores just below average in the market metric.

Team

At the head of Place Technology is co-founder and CEO Brandon Metcalf. Metcalf is no stranger to starting companies. In 2011, he founded Talent Rover, a global recruitment software provider. The company was acquired by Bullhorn in 2018. Metcalf stayed at Bullhorn briefly before starting another company, Blueprint Advisory. Blueprint Advisory helps other businesses to build out their own operations on the Salesforce platform. Today Metcalf runs both Place Technology and Blueprint Advisory. Experience with both Salesforce integration and starting companies places Metcalf in a strong position to lead Place Technology.

The other key individual at Place Technology is co-founder and CTO Kabe VanderBaan. VanderBaan worked with Metcalf at Talent Rover and is currently a board member at Blueprint Advisory. He has more than 15 years of high level engineering experience at various technology companies, including a decade at Motorola. His past work with Metcalf and his strong technical background make VanderBaan well-qualified to lead the technical efforts at Place Technology. 

Place Technology is led by two co-founders who have worked together in the past, which bodes well for the company’s success. Metcalf has led a prior startup to a successful exit, and VanderBaan has almost two decades of technical experience. Given these strengths, the team score for Place Technology is quite high.

Differentiators

While Place Technology can boast its dedication to the Salesforce platform, that appears to be more or less where its differentiation ends. There are a number of similar products on the market today, including Vena, Prophix Software, and Planful, to name a few. Other big companies, such as Oracle, have similar applications that serve as direct competition to Place Technology. The company also has very little in the way of defensibility. It has no patents, and the barriers to entry are low when it comes to building out a digital platform. As a result, the differentiators score for Place Technology is its lowest across all five metrics.

Performance

Place Technology has a complete and monetized platform at its disposal. At present, it has 40 customers paying for its services, and that number is expected to grow in the near future. In 2019, the company generated sales of $237,837. Revenue increased modestly to $261,312 in 2020. Financial performance has not been provided for all of 2021 so far, but management has said that revenue is averaging $106,432 per month for the past three months, implying annualized revenue of $1.28 million. If this trend continues, then the firm could have a breakout year this year. The one concern for Place Technology is its monthly burn rate — which averages to around $210,000 based on its 2020 financials. That’s a high burn rate, especially for a software company. While Place Technology is seeing growing revenue and customer counts, the company’s burn rate limits its price score to just slightly above average.

Risks

The overall risk profile of Place Technology appears fairly low. Market and financials are the main areas of concern. Place Technology faces significant competition in the space. When competitors offer similar services, the deciding factor usually becomes price — and Place Technology does not stand out in that regard.

From a financial standpoint, Place Technology is generating substantial losses. Net loss in 2020 was $2.5 million, and the monthly burn rate is around $210,000. The company’s capital efficiency is not high at this time. As it grows, Place Technology may have to seek additional funding, which could result in dilution for investors in this round.

Bearish Outlook

Place Technology has developed a very niche product for a small, niche market. It is also facing significant competition from larger companies with more funding. Place Technology’s platform does not seem much different from the offerings of its competitors, which further increases the risk profile of the company. The company will need to work hard to distinguish itself, either expanding beyond its focus on Salesforce or developing capabilities that its competitors don’t offer. However, those efforts will take time, and Place Technology is also burning capital at a fast rate. Increasing capital efficiency while also developing a defensible moat are difficult tasks for any company to balance, and Place Technology will need to address both issues as it grows. 

Bullish Outlook

Place Technology has spent the time and effort to build out a fully operational platform. The company has acquired customers, and its revenue appears to be growing at an encouraging rate. Co-founders Brandon Metcalf and Kabe VanderBaan bring ample experience and technical expertise to the company, increasing the likelihood of success. The company’s valuation for this round is also reasonable, especially compared to other growth stage startups that are raising capital. If Place Technology can continue growing its traction, the company could be well-positioned to secure a defined market niche for itself.

Executive Summary

Place Technology has created a financial platform that centralizes financial data flow and enables real-time forecasting. The company is led by two experienced co-founders and the valuation being offered to investors is reasonable. Even more exciting is its overall performance, which has been especially impressive over the past few months. 

On the other hand, the market opportunity for Place Technology is limited. The company faces a fair amount of competition, and some of those competitors are even offering similar services, which could impact the company’s overall success. In addition, the company’s capital efficiency has not been strong, and this could affect future growth. Taking all things together, Place Technology is a Neutral Deal at this time.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com

Analysis written by Daniel Jones.

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