Taloflow

Early Stage
BETA - Reg D

Choose the right vendor

Overview

Platform

Self Managed

Start Date

12/23/2020

Close Date

01/12/2021

Max. Goal

$1,786,956

Min. Investment

$1

Security Type

Equity - Common

Funding Type

RegD 506(b)

Location

Los Angeles, California

Industry

Business Services, Software, & Applications

Tech Sector

EnterpriseTech

Taloflow is raising funds independently through Reg D 506(b) raise. The company has developed a platform to look for the best cloud vendors using auto analysis. The platform allows users to analyze their use case across thousands of data points, receive detailed ROI and TCO analysis, and choose the most suitable vendor without time-consuming research and costly mistakes. Louis-Victor Jadavji, Jason Kim, and Todd Kesselman founded Taloflow in May 2018. The current crowdfunding campaign has a maximum target of $1.79 million. The campaign proceeds will be used for growth and expansion.
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Other Information

Summary

Taloflow has been selected as a “Top Deal” by KingsCrowd. This distinction is reserved for deals selected into the top 10% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com.

Problem

Since the launch of Amazon Web Services (AWS) in 2006, cloud computing has become the standard for storage and software among companies large and small. Cloud computing offers a dramatic improvement over traditional hardware, servers, and data centers in that it democratizes IT solutions for modern businesses: it’s easier than ever for any entrepreneur or business to develop and store their proprietary solutions on the cloud.

As cloud computing has become a cornerstone of 21st century business, the market for public cloud services such as AWS, Microsoft Azure, and Google Cloud Platform has ballooned. Gartner reported that the global market for public cloud services will reach $206.2 billion in 2019, and will expand to $240.3 billion by 2020. But as companies across industries ramp up to spend hundreds of thousands or millions per year on cloud services, they’ll be met with a disturbing realization: a full 35% of the average cloud services payment is wastedDevOps predicts that $14 billion of cloud spend will be wasted in 2019.

In its report on cloud spend, Rightscale identified the primary factors driving high waste. First, cloud pricing and billing reports are extremely complicated, with millions of line items and myriad products, price points, and discounts to wade through; moreover, cloud providers are constantly changing their models and processes, so finally figuring out your billing pattern may only keep you in the know for months before a major overhaul.

In addition, the use of cloud services is inherently decentralized. Individual engineers, development teams, or business units have the ability to consume cloud space without approval from a central authority, which is necessary to enable agile development and rapid innovation. However, this decentralization means that actors without deep knowledge of cloud pricing or incentive to reduce cloud costs across a company are the ones pushing the button to request more cloud services, adding up to a huge bill.

Solution

Entrepreneur Louis-Victor Jadavji was busy building his first company, Wiiv Wearables, when he casually began to realize the pain of cloud spending waste. His team hustled to find a way to understand their cloud services bill, and tried multiple tools to manage their usage and costs. However, he describes spending days at the end of each month deciphering bills and building spreadsheets to attempt to understand why they were overpaying so much for cloud services. “It was like, akin to a murder mystery when you’re trying to figure out AWS,” said Jadavji.

The experience left Jadavji, along with colleagues Jason Kim and Todd Kesselman, motivated to finally solve the inefficiency in cloud spend waste. They founded Taloflow in 2018 and began developing the company’s first tool, called Tim (Taloflow Infrastructure Monitor), an AI tool to monitor a company’s cloud spend in real time, alert them immediately to any anomalies, and forecast future spending.

Tim intakes all activity from a client’s AWS infrastructure via AWS Event Bus and the AWS Cost and Usage Report. From this data, Tim allows clients to improve their reaction time to incidents; rather than waiting days or weeks to realize a massive spending overage (or discovering it on the bill at the end of the month), Tim alerts to spending anomalies in real-time to save clients money. Tim also allows clients to break down their data through filters and tags to monitor spend across business units, correlating spend with events like deployments to illuminate the root causes of waste. Tim uses machine learning to constantly improve and refine its reporting and prediction capabilities.

Since its founding only one year ago, Taloflow participated in Creative Destruction Lab’s Toronto Artificial Intelligence cohort and graduated from Plug and Play’s Enterprise 2.0 Accelerator. The company is certified as an Advanced APN Technology Partner of Amazon Web Services.

Team

Taloflow is led by CEO Louis-Victor Jadavji, the former co-founder and current board member of Wiiv Wearables. His prior entrepreneurial journey at Wiiv was very successful; Wiiv has raised over $14 million of venture capital funding for its AI-enabled custom footwear, and broke two Kickstarter fundraising records at its initial launch. Jadavji was featured on Forbes 30 Under 30 list, and is a frequent speaker at technology forums like TechCrunch Battlefield and Kairos Global Summit.

Two co-founders join Jadavji to make up Taloflow’s founding team. Todd Kesselman is Taloflow’s CTO and Chairman, a technologist and serial entrepreneur with over three decades of experience in the technology industry. Kesselman was an early adopter of AWS, building systems on the platform as early as 2007 (one year after AWS’ launch), and built the rules engine application that underpins Taloflow’s Tim tool. Jason Kim is Taloflow’s VP of Product; he was employee number four at Jadavji’s first startup Wiiv, and a former Director of Product at fintech startup Grow.

Growth Plan

Taloflow’s Tim tool is currently being used by 8 or more companies in a beta phase, collecting data to improve Tim’s machine-learning algorithm. Taloflow’s goal is to convert these beta users to paying customers in Q4 2019, and launch their product on the AWS marketplace in January 2020. They plan to raise a $3 million or greater institutional capital round in early 2020.

In the long term, Taloflow is targeting cloud-native, mid-market AWS clients who spend over $1.2 million per year on cloud services. They see their growth being driven by four levers: direct sales to target clients, thought leadership at key developer events, channel partnerships with AWS consultants, and inbound leads via their position in the AWS marketplace.

Why We Like it

  • Market Size: The market size statistics for cloud computing are undeniable – with $240 billion projected spend in 2020 alone, and market growth of almost 20% in recent years, cloud computing is and will continue to be a major line item for virtually all mid-size and enterprise technology companies. Further, the statistics on cloud-spend waste are even more compelling – an industry with the dubious distinction of a full third of spending wasted, $14 billion in 2019 alone, is primed for a sophisticated tool to deliver cash back to clients.
  • Ease of Sales: While selling enterprise SaaS products is notoriously challenging, Taloflow has the unique advantage of offering a solution that is, very directly, saving customers money rather than requiring net new spend. As Jadavji describes himself, the sales pitch for Taloflow is a “no-brainer,” because the statistics on cloud-spend waste are so compelling and Tim promises to save clients money within a month.
  • Proven Team: CEO Louis-Victor Jadavji is a proven entrepreneur himself, and the founding team is only more impressive with the presence of CTO/Chairman Todd Kesselman, a seasoned technologist with experience building a $100 million revenue company. The broader Taloflow team includes top engineers from leading unicorns like Pinterest and Slack. Overall, there is no doubt that the Taloflow team has the knowledge and experience to both build a cutting-edge AI tool and bring it to market successfully.

The Rating: Top Deal

Taloflow is a Top Deal because it enters a space that is sorely in need of a working solution to eliminate massive waste. With virtually all midsize to enterprise technology companies operating on the cloud, collectively spending hundreds of billions each year to giants like Amazon, Microsoft, and Google to host their computing infrastructure, cloud spending is only set to increase – and thus, wasteful spending will also increase without the assistance of an adaptive tool to monitor, alert, report, and predict spending anomalies.

Compelling market opportunity and solution aside, Taloflow is led by experienced entrepreneurs and technologists who are well-educated in IT market dynamics and prepared to develop a sophisticated tool and bring it to market in top enterprises. Upon the successful conversion of current beta users into paying clients, Taloflow will be well positioned for a full launch to enroll countless more corporate players onto Tim’s roster.

Finally, recent exits in enterprise software have led to a “gold rush of enterprise IT,” according toThe Wall Street Journal. Cloudflare, a cloud platform helping companies monitor performance and security on their cloud properties, is set to IPO this fall at a valuation between $3.5 and $4.2 billion, joining other recent cloud-adjacent platforms that have gone public with growing share prices. While the public markets are a potential exit route for Taloflow, there’s reason to believe that a major cloud services provider like Amazon, Google, or Microsoft see value in acquiring the company to integrate better spend monitoring into their own suite of offerings.

In sum, Taloflow is led by a top team with experience in a space that is growing rapidly and in need of intervention to end a hemorrhage of cash waste; exit opportunities are attractive as the cloud computing space, and enterprise IT space more broadly, continue to attract investors’ attention.

Analysis written by Katy Dolan on September 17, 2019.

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Taloflow on Self Managed 2020
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Platform: Self Managed
Security Type: Equity - Common

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