“There are many more financial planning tools out there, but what really distinguishes Finance Navigator from other tools is that we have built it specifically for startups, keeping in mind many of our users might never have built a financial model before or might not have any finance background whatsoever.”
First of all, we would like to thank Wout Bobbink, Co-Founder of EY Finance Navigator and Digital Marketing Lead for agreeing to respond to our questions.
1) According to your website, you have launched the Finance Navigator in October 2019. Please tell us about its background and why did you launch it?
Over the past 5/6 years a couple of EY colleagues and me have been working very closely with startups and scale-ups in different countries (Netherlands, Belgium, Luxembourg, Germany, Scandinavia, etc.) through EY’s various startup programs and collaborations (e.g., EYnovation – a program in which we try to support high-potential startups grow faster than they would on their own).
We noticed that financial planning is a (very) relevant topic already in an early stage. Having financial projections in place is crucial for proper cash flow management and for fundraising purposes. However, we saw many entrepreneurs struggle with creating financial projections, due to lack of:
- understanding and experience in finance;
- resources to fill this skill gap by, for instance, hiring a controller or CFO;
- time and, sometimes, motivation as customer and product development are prioritized.
For years we have supported these kind of entrepreneurs with their cash flow management and funding rounds by means of, for instance, building a financial model template in Excel, providing workshops and consulting. However, such support is not scalable and therefore our impact was only limited to a certain number of startups. That is where the idea of Finance Navigator was born. We wanted to make our support more scalable, to be able to help out startups on global scale, to make true impact. Therefore, we started turning our knowledge and experience with financial modelling into a startup-friendly software tool.
2) Based on the information published in your website, the Finance Navigator is a financial modelling software. What are the advantages of Finance Navigator vs other financial modelling tools?
The main advantages are as follows:
- The tool is specifically built for startups and scale-ups; and
- We have included an algorithm that challenges the user on his/her financial model, just like a real consultant or investor would do.
There are many more financial planning tools out there, but what really distinguishes Finance Navigator from other tools is that we have built it specifically for startups, keeping in mind many of our users might never have built a financial model before or might not have any finance background whatsoever.
For this reason, before our go-live we had already validated the tool with both entrepreneurs as well as investors. Furthermore, we have made the tool very intuitive, focus a lot on educating the user and have built in a smart algorithm that helps the user improve his/her financial model. Users can use the ‘Analysis’ functionality, which will trigger an algorithm performing checks on the user data, and compare the data to sector specific benchmarking info. Our tool will tell you, for instance, how your projected EBITDA margin compares to the industry average, whether your payment terms make sense or not, and whether you’re perhaps a bit too optimistic in your forecasted sales looking at your revenue per employee.
In this way we try to challenge the user and prepare him/her for tough questions an investor might also ask. In this way we hope to contribute to the user’s learning experience and increase the chances of raising funding successfully.
3) Is there any particular sector or industry that Finance Navigator is suitable or not suitable for?
Finance Navigator provides a lot of flexibility in terms of creating projections. It allows the user to project revenues, expenses, etc. according to pre-defined formats (e.g. a specific business model), but you can also edit data like you could in an Excel spreadsheet. We basically try to combine speed with customization. This makes the tool sector-agnostic and suitable for practically all types of businesses. However, of course the more complex you want to make your projections, the more time it will cost to build your financial model.
4) Your website claims that the Finance Navigator has already supported startups in more than 80 countries? Does it have a particular geographic coverage?
Finance Navigator indeed has users in more than 80 countries worldwide. When we just launched the tool, most of our users were from the Netherlands and several neighboring countries (which made sense as we first launched the tool there).
However, from there we have slowly spread to the rest of Europe, Oceania, and North America. We currently notice that Middle East, South-East Asia, India and parts of Africa and South-America are also starting to pick up.
5) What is next for the Finance Navigator? Are you planning v2 of the software or to expand its coverage to other (non-financial) aspects?
The vision for Finance Navigator is for it to become the go-to tool for financial projections for all startups worldwide. To achieve this we constantly develop new features and build improvements based on user feedback. Its strength and proposition are really the financial side of business planning and that is also where we can add most value given our experience and expertise. For that reason I do not foresee new non-financial functionality, but of course we will continue to add more features that improve the software from financial planning and usability perspective.
==========
Co-Founder of EY Finance Navigator and Digital Marketing Lead
