Finout, a cost-monitoring app for cloud software and platforms, has emerged from stealth today with $18.5 million – a combination of a $14 million Series A funding round led by Team8 Capital and a $4.5 million starting round led by Pitango First. Co-founder and CEO Roi Ravhon said the capital will be put into adding support for new cloud providers, infrastructure and middleware and expanding the Finout team to 40 employees by the end of the year.
As companies increasingly migrate their workloads to the cloud, it is becoming clear that cloud spend is difficult to predict and manage. According to a 2022 Flexera report, companies are wasting an estimated 32% of their cloud budget by underestimating usage. Ravhon says he founded Finout to not only make the price transparent for the cloud environment, but also lower the cost of cloud-native software organizations use every day.
Before launching Finout, Ravhon worked as a director of core engineering at Logz.io, where he met Asaf Liveanu, who is currently Finout’s CPO. While running multi-cloud environments, Ravhon said he was faced with hard-to-answer questions about IT spending from executives, such as “Is a 5% increase in Amazon Web Services (AWS) bill good?” and “How much does a specific customer cost?”
“It became clear to me that the tools available in the market were not advanced enough to answer … key [spend] questions from the leadership, so I decided to embark on the Finout journey,” Ravhon said. “Together with Finout’s third co-founder, Yizhar Gilboa, whom I met while serving in Israel’s elite intelligence unit, Liveanu and I built the tool we were missing.”
Finout tries to estimate together the costs of cloud providers, data warehouses and content delivery networks and combine them into one big bill. The platform integrates with AWS products, Kubernetes clusters, Snowflake storage, Stripe, Twilio and more and correlates and analyzes costs with business KPIs while providing recommendations and alerts.
In addition to a consolidated account, Finout can split the costs of services and products into different, arbitrary segments. For example, Ravhon said it can expose the cost of individual Kubernetes pods running in a cloud instance, or the amount it costs to run apps to serve a specific customer.
“The industry is moving towards usage-based… To take an ecommerce platform as an example, a simple transaction flow can go from Akamai to AWS to Stripe to Twilio to Mailchimp and back to AWS,” Ravhon said. “The executive and finance teams can use Finout to understand the profitability of every customer, function, business unit and service they sell. just know that [a company] Spending a million dollars a month on cloud services is great, but also pointless. Is it a lot? Is it good? Did it grow in relation to the customer base? What is the price of a specific customer on that account? These are the questions leadership seeks to answer as cost management becomes a board-level priority.”
Ravhon sees Vantage and Cloudthread as rivals in cloud cost monitoring, as do established companies such as VMWare’s Cloudhealth, Harness’ Continuous Efficiency and Apptio’s Cloudability. It’s a busy segment – there’s also Spot and Replex. But for what it’s worth, Ravhon claims that Finout is the only vendor addressing the “border-based” usage problem with native support for technologies like Kubernetes.
Finout’s dozens of clients include Logz.io, the former employer of Ravhon and Liveanu, in addition to Singular, Bigabid and Riskified. Ravhon claims that the platform has “hundreds” of users.
“We view both the pandemic and the technical slowdown as an opportunity for Finout. The pandemic has boosted cloud adoption across many industries, and the technology slowdown is pushing many companies to focus more on controlling their cloud spend,” said Ravhon. “With companies across the spectrum now looking for granular-level data points to inform key decision-making, we are in a prime position to capture significant market share.”
Liran Grinberg, co-founder and managing partner at Team8, added in an emailed statement: “The correction in the technology market has shifted the focus from revenue growth to profitability, gross margins, unit economy and sound business metrics for sustainable, long-term success. We’ve witnessed dozens of companies struggling to develop a solution to cope with the surge in usage-based cloud pricing, but nothing was available – until now… That’s why we’re so excited to Finout is uniquely positioned to enable cost control across cloud platforms by providing a turnkey solution that empowers the modern cloud-based enterprise to achieve its goals. [spend] goals.”
R Squared Ventures, Jibe Ventures and toDay Ventures also competed in Series A.