Dive Brief:

• The amount of software products tailored for the office of the CFO has exploded in recent years as finance teams struggling with growing pressures and outdated tools have become an increasingly attractive market for tech vendors, according to an analysis by venture capital firm Norwest Venture Partners.
• The evolution of the CFO software stack, accelerated by the rapid of rise of artificial intelligence, “mirrors the broader transformation of the CFO’s role — from a meticulous keeper of books to a strategic architect,” Norwest’s Sean Jacobsohn and Nikhil Goel said in a Tuesday blog post.
• “The global market for tailored financial solutions is flourishing — and getting more crowded by the day,” they wrote.

Dive Insight:

The value of the global “office of the CFO software market” surpassed €50 billion in 2023 and is projected to exceed €100 billion by 2028, according to an estimate by global investment bank Houlihan Lokey.

The fast-evolving market includes providers of core financial management software products as well as a growing field of smaller players offering specialized finance tools, according to the blog post.

“Our goal was to showcase the breadth and depth of the CFO software market, highlighting both established players and emerging startups that are driving innovation in the space,” Jacobsohn, a Norwest partner, said in an email.

More than 300 tech companies currently make up the global CFO software industry, according to a “market map” developed by Norwest as part of its analysis. Of those, more than 100 are new entrants that have joined the market in the last five years or so, Jacobsohn said.

Vendors in the core financial management category, including large incumbents like Oracle and SAP, “provide a unified view of the company’s financial health, but can lack the deep insights and functionality focused solutions provide,” according to the blog post.

Generative AI is rapidly changing the landscape of the CFO software market, Jacobsohn said.

“We’re seeing a surge in AI-powered tools that can automate tasks and augment decision-making with precision and speed across various finance functions, from tax and treasury management to procurement,” he told CFO Dive.

The market map includes Norwest-backed startups such as procurement management software maker Oro Labs and cloud cost management platform provider AmberFlo.

A recently published Gartner study found that customer relationship management, cloud-based enterprise resource planning, and analytics and business intelligence tools were the top three most valued technologies in the finance function, with all three expected to see high levels of future investment.

On-premises ERP saw the largest decline in value, a shift “highlighting the growing preference for cloud-based solutions that offer advanced capabilities,” according to a report on the findings.

Big Four accounting firm KPMG found last year that about eight out of 10 companies were struggling to keep up with rapid technological changes in the age of AI, with financial constraints being a major stumbling block.