Right90, a maker of software that helps businesses better forecast revenues, has raised $10 million in its third venture round and says that although it is "in shooting distance" of being cash flow positive, it may require one more funding round to get there.
The company, whose latest funding came from lead backer Horizon Ventures and previous investors InterWest Partners, Shasta Ventures and U.S. Venture Partners, has raised a total of $27 million since it was founded five years ago. Founder and CEO Kim Orumchion, who like everyone running a startup in this climate is a little bit nervous about the economy, says the company's performance in the near future will hinge on whether businesses opt to invest in technologies that may save them money down the line, or cut costs across the board.
Right90, which counts Seagate Technology [STX] among its customers, is named for the 90 days that typically fill a quarterly financial period. It offers technology that helps businesses build so-called bottom-up revenue forecasts which take into account the most recent performance and forecasts from multiple company divisions and tend to be more accurate than "top down" forecasting, which bases future results on past performance.
Orumchion says he got the idea for Right90 while working at other companies such as the the Internet book seller Fatbrain.com, which had difficulty predicting revenues. He says even the most established enterprises such as car makers can be challenged in this area if they use past performance to predict future results and fail to factor in changing business conditions such as rising oil prices. The problem with forecasting from the ground up, however, is that it is a much more complex process.
"Especially in times of uncertainty, what management thinks will happen from the top down, doesn't always happen," Orumchion says. "We give them the tools to better understand their busienss."
Right90's primary competition is the basic Excel spreadsheet, but he says that businesses often have trouble using Excel accurately and in a timely fashion.
Discussing how the economy would affect his own company's growth plans, he acknowledges that "clearly some customers will not buy (the Right90 software."
"But others will say that this is the time to invest. Our business proposition is to give them the tools to gain a competitive advantage." -- Andrea Orr
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