Dive Brief:
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Tech startup Nominal, which is seeking to disrupt the enterprise resource planning sector using artificial intelligence, announced Wednesday that it has raised $9.2 million in a seed funding round led by Bling Capital and Hyperwise Ventures, with participation from executives at Salesforce, ServiceNow and Intel.
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ERP refers to software used by companies to manage key day-to-day business activities, including accounting and procurement. The current ERP landscape is plagued by outdated technologies among other challenges, according to New York-based Nominal, which is primarily focused on mid-market, multi-entity businesses such as holding companies and multinational technology firms as part of its initial go-to-market plans.
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“Today's dominant ERP software companies were started around 50 years ago and built for large enterprises,” Kyle Lui, general partner at Bling Capital, said in a Nominal press release announcing the funding. “These solutions are expensive and difficult to implement, particularly for smaller companies with limited time and resources.”
Dive Insight:
The worldwide ERP software market grew 8% in 2022 to $44 billion in total revenue, Gartner analysts said in a report last August. Most providers saw revenue growth due to new business, expansion sales and higher-than-normal renewal price increases, the report said.
Microsoft, one of the market’s major players, announced last summer that it incorporated a new set of generative AI capabilities into its ERP platform known as Dynamics 365.
“ERP systems have long been the central nervous system of modern businesses, centralizing data for better business insight from core functions like finance, HR, procurement, resourcing, and supply chains,” Stephanie Dart, senior director of product marketing for Microsoft Dynamics, said in a blog post at the time. She added that traditional ERP solutions have struggled to keep pace with “the dynamic nature of today’s global markets.”
After polling over 120 financial professionals, Nominal found that for every dollar spent on software licenses, an additional $3 is spent on system integrators — businesses that specialize in helping clients to bring together disparate hardware and software components into a comprehensive IT system. “The problem is further exacerbated in multi-entity companies,” the Wednesday release said. “The complexity of managing multiple ledgers, currencies and regulations has amplified the need for expensive customizations and convoluted spreadsheets.”
Nominal operates a generative AI-powered and cloud-based platform designed to modernize and automate accounting and financial management. The company said its key innovation is its “generative subledgers that transform free text, documents and spreadsheets into automated workflows.”
The startup plans to use its new funding to accelerate its product offering, expand its market reach, and increase sales and support resources in the U.S., according to the release. A spokesperson said the company has chosen to not disclose the names of the Salesforce, ServiceNow and Intel executives who participated in the funding round.
