Businesses nearing the end of a financial reporting period roll up their sleeves for the task of reconciling the books, with accounting and finance teams responsible for making sure everything adds up the way it should. A Seattle software startup, Sigma IQ, believes it can make this process, which involves validating an organization’s financial accounts by checking that their balances are correct, cheaper and less error-prone for mid-sized and large businesses.
Sigma IQ, which was incubated in the startup studio Pioneer Square Labs, exited stealth mode this week and announced it has raised $3.5 million in equity funding to propel its digital tools toward the commercial market. Vulcan Capital—a multi-billion dollar investment firm launched by the late Microsoft co-founder Paul Allen—led the funding round.
Sigma says a beta version of its software is being used by several customers already, and it plans to launch a public version later this year.
Account reconciliation involves checking for errors and fraud, which can help businesses avoid penalties from auditors. The goal is to find and correct inconsistencies between different sets of financial records. For example, a company’s accounting division may confirm that, in a given month, the figures in its general ledger match those in sub-ledgers specific to receivables and accounts payable.
Several big tech companies offer tools for account reconciliation matching, including Microsoft (NASDAQ: [[ticker:MSFT]]) and Oracle (NYSE: [[ticker:ORCL]]). But according to Sigma IQ’s website, many of the programs available today require users to manually create rules for comparing bank statements with other documentation sources.
Sigma IQ claims its software “maximizes match performance and accuracy without the need for manual rules or updates,” which the company says is made possible by its machine learning algorithms and other proprietary technology.
The startup is marketing its cloud-based software to accounting and finance departments that process large volumes of transactions. Sigma IQ says customers will be able to install and begin using its tools in under a day.
Sigma IQ says it plans to use some of the proceeds from the funding round to expand by hiring more engineers.
Glenn Wisegarver is Sigma IQ’s founder and CEO. He previously served as chief financial officer at several companies, including Moz and Zectec, according to his LinkedIn profile.
Other participants in the funding round include Barton Ventures, Clear Fir Partners, Falcon Partners, Family Angel Management Fund, Keeler Investments Group, and PSL Ventures, the investment arm of Pioneer Square Labs.
