PlanDelta, a Bulgarian startup for agile financial planning that aims to bridge the gap between strategic planning and flexible financial budgeting raised a €350K pre-seed round from the Bulgarian venture capital fund Eleven Ventures. The round was joined by an American angel investor, Christian Carrillo, who is a Board Advisor of the PlanDelta team.
With the mission to allow SMEs to do budgeting in an agile and collaborative manner as the project management tools do, PlanDelta is in the process of creating a solution for continuous financial planning based on business needs, strategies, and initiatives.
“Our decision to invest in PlanDelta is first and foremost based on the team. The two co-founders, Martin Milanov and Milen Manev, have been friends for 25 years and bring 30+ years of experience respectively as CFO and Tech VP in software companies. In addition, we see great syncing between the need of the SME planning tools market demand and what PlanDelta has to offer,” explains Vassil Terziev, Managing partner at Eleven.
Identifying a solution out of a personal need
The idea of PlanDelta was born out of the industry pain points that Milanov has recognized in his role as a CFO at Chaos. “It was a big challenge to introduce a relatively flexible budgeting process. One that is fast and adaptable enough, but without sacrificing the integration of all the complexities happening in one company. There are many elements that need to be factored in and for quite some time we were doing that in Excel,” shares Milanov.
He explains that when the pandemic hit, companies had to adapt their processes and budgets due to the effects of national lockdowns. For him, this meant that all the work his team had put into developing a very granular budget in the past three months was completely outdated.
“At that moment I was struck by the reality that we had to develop an entirely new budget from scratch not for 3 months, but for 3 days and to be able to update it on a weekly basis. This was impossible given the current tooling. I thought that there has to be a more flexible way to iterate multiple scenarios fast with the same level of detail. And that is how I started researching online for flexible budgeting tools. This opened my eyes to the existence of a whole new industry – Financial Planning and Analysis (FP&A) which emerged around 15 years ago when Cloud services started gaining traction,” highlights Milanov.
Why do companies need agile budgeting?
“The tier of small to low mid clients is not very attractive to the main cloud FP&A vendors, making the target market practically underserved. PlanDelta aims to serve this low-mid segment and enable fast-growing companies to streamline their financial planning and make this process integrated with strategic planning in real-time,” shares Vassil Terziev, Managing partner at Eleven.
After recognizing that there might be an unfulfilled market gap for more flexible financing tools, he started to reach out to fellow finance professionals to learn more about how other companies go about their budgeting. And the opportunity became clearer. Businesses wanted to enjoy budgeting flexibility within a structured and controlled framework.
Finance Managers wish to work with Excel because it gives them all the freedom, but spreadsheets are not efficient when organizations become larger and the budgeting gets more complex. On the other hand, financial planning software tackles the problem with scalability but does not leave any room for financial maneuvering.
“Besides the high price and the long implementation period of existing FP&A tools, the main problem that I identified in the industry is that companies still had to make a trade-off between having flexibility and control. Excel allows you to develop business models in seconds, while financial planning software solutions allow you to establish a controlled environment with versions’ control, augmented collaboration and audit to promote data trust” Milanov elaborates.
According to him, this trade-off is a huge pain point for many companies. And usually, SMEs stick to working with Excel for as long as they can. But when they scale and start working with investors, and when their financial planning becomes complex, they often have no other choice but to sacrifice budgeting flexibility.
However, when businesses finally buy a pricey financial planning tool, inside the financial department, there happens a “quiet revolution”. As Milanov explains, finance professionals continue to do everything in Excel and only transfer data into the financial software which causes great inefficiency.
PlanDelta’s startup journey
When Milanov was convinced that there was a significant business potential in the idea for an agile financial tool, he reached out to Milen Manev, his friend from university and a technical and product specialist with years-long experience in US-based HR software company. Manev confirmed that workforce planning, an integral part of the financial planning, was not well solved in the HR solutions. Together they set on a journey to validate, test, and look for investors. As this is not the first startup for both of them, they wanted to apply the lessons learned from their previous ventures and focus on perfecting their product-market fit before writing a single line of code.
Being in the early stages of the development of their venture, the co-founders of PlanDelta, Martin Milanov, and Milen Manev will use the investment to develop the MVP of their solution.
For that aim, they have already started building a Bulgarian team of technical and product experts. Their plans are to tap the European and US markets and focus on fast-growing SMEs with increased business complexity, agile transformation that is underway and thriving in industries such as IT, BPO, where the main asset is the high value add workforce with a well-recognized need for delegation and collaboration.