Israeli FinTech start-up AlgoValue has launched a cloud-based software platform that aims to change the way valuations are performed. The SaaS (Software as a Service) platform simplifies valuation challenges and creates a common language among the professionals engaged in valuations - lawyers, venture capitalists, accountants, angel investors, and CFOs of growth companies, who often disagree on valuations. Due to the mathematical complexity involved in valuations, financial organizations in the US have recently invested millions of dollars in unsuccessful attempts to develop similar software platforms.
Alongside a growing North American customer base, the platform is being increasingly adopted by companies in Europe and in Israel.
AlgoValue was founded in 2011 by CEO Raphael Meyara, CFO and product manager Tsachi Hageg, and CTO Ilan Solodki. Before joining AlgoValue, Meyara managed valuation projects at PricewaterhouseCoopers, where Hageg served as a manager of the Valuation Department for over five years.
Meyara said, “When we worked for PricewaterhouseCoopers, we were struck by the bitter disappointment experienced by both investors and entrepreneurs when they witnessed the painful gap between the sums they thought they would receive from a particular venture, and what they actually obtained. As a result, we developed a breakthrough one-stop-shop cloud-based platform, which is going to change the way valuations are performed and set a new standard for valuations and related added-value services. Our secure software helps ensure that lawyers, venture capitalists, CFOs, accountants, angel investors, and other professionals engaged in valuations will easily understand each other. We expect 2015 to be the breakthrough year in which many more U.S. and Canadian firms will join the bandwagon and adopt AlgoValue’s platform.”
Capital structures of a growing number of private companies are becoming more complex because of preferred shares, warrants, stock options, convertible debts, and other factors, which are becoming increasingly prevalent, due to valuation-related events, such as the raising of capital. Meanwhile, standard processes and tools for valuation are still expensive, full of human error, and are time consuming.
AlgoValue’s secure software automatically handles the challenges of valuating complex capital structures of private companies to yield accurate results, while slashing the time needed to perform valuations. AlgoValue’s platform can reduce the time needed for valuations by up to 80%. The cloud-based platform can perform valuations, simulations, and audits of valuation work for organizations and professionals, such as accounting firms, valuation companies, venture capital funds, and law firms, as well as CFOs of growth and startups and angel investors.
The user-friendly platform computes the value of stock and other securities in privately held companies. It also calculates the portion of value to allocate to each shareholder, based on their financial rights and obligations as owners of the company. As a result, AlgoValue’s tool simplifies compliance burdens, reduces the risk of financial misstatements, and provides shareholders information to optimize their investments.
Studies by AlgoValue have shown that the software has not only simplified valuations, but improved margins by as much as 80%, while avoiding the mistakes that occur in Excel-based valuations. Moreover, users are able to share the inputs and outputs of the platform in real-time with all the professionals involved in a valuation.
Published by Globes [online], Israel business news - www.globes-online.com - on January 12, 2015
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