Earlier this month, Reuters reported reported that hedge fund Muddy Waters had accused Uruguayan payments firm dLocal of using customer money to pay a special dividend to its pre-IPO shareholders in June 2021.
The hedge fund said — according to Reuters — that “all (dLocal) needed to do to address this issue was to provide a statement on how the cash flows reconcile.”
The problem of cash flow matching is growing, especially in light of the explosion of digital payments since the start of the COVID-19 pandemic. As companies that handle customer payments expanding into new markets, adding new products and increasing transaction volume, the more complex the process becomes.
Enter Nilus, a startup that aims to simplify that process with a no-code financial transaction platform. Last year from a basement founded by Daniel Kalis and Danielle ShaulNilus raised $8.5 million in a seed funding round led by Bessemer Venture Partners.
As in the case of many startups, both Kalish and Shaul said they’ve experienced first-hand the problem they’re trying to solve in their previous roles. Kalish spent more than five years at PayPal, most recently as Head of Market Development and GTM for Central Eastern Europe, Russia and Israel. Shaul spent more than five years at Fundbox – most recently as a software architect and before that as an R&D manager leading risk and underwriting engineering for both credit and fraud and building cutting-edge products using ML and big data.
“The payments industry has a huge data problem these days,” Kalish told businessroundups.org in an interview. “At first glance, it seems very easy to start collecting payments, for example by working with Stripe, PayPal or banks. But behind the scenes, the data is so messy and finance teams struggle to understand what’s happening, what their financial position is, or make sure there’s no risk involved in accepting and sending payments to their customers.”
The biggest challenge, he added, is the fact that financial payment data actually resides between multiple locations within an organization.
“You have payment data with your payment processor or with your bank or with your ERP and your finance team often tries to match that data manually or by running some funky Excel or SQL scripts so they can get the clarity they need their financials and their activities,” said Kalish.
When building financial infrastructure over the past decade, Shaul said she saw finance teams “going back and forth” identifying incoming payments.
So the two teamed up to build Nilus, a company they say provides a “plug and play” payment operations platform for finance teams moving significant amounts of dollars. Their goal is to help these teams understand all the underlying data behind payment activity so they can have “a real-time view of cash, mitigate risk and always be audit-ready,” said Kalish, who serves as CEO of Nilus.
Kalish and Shaul say the technology Nilus built can “really easily” connect to the data via APIs, then analyze it with its algorithms and ultimately automate reconciliation, reporting and payment workflows for finance teams.
“We see alignment as like building blocks on which you can build a lot of capabilities,” Shaul, the startup’s CTO, told businessroundups.org. “Once you can move the money with confidence and have visibility, you can manage things, forecast things, predict things — you can do so many great things on top of that.”
Image Credits: Nilus
Nilus’ target customers are fintechs, financial services companies, marketplaces, and vertical SaaS outfits – or really any company with embedded fintech products that are already moving customer money. While it wouldn’t reveal specific customers, Nilus says it’s working with them companies that process “hundreds of millions of dollars”.
The startup’s headquarters and go-to-market team are based in New York and the tech team in Tel Aviv. The company currently has 18 employees.
Also participates in the startup’s seed funding round Better Tomorrow Ventures, Symbol and the CEOs and founders of fintech companies including Unit, Alloy, Melio and Lithic.
“We’ve seen so many companies working with legacy financial workflows, the space is in dire need of innovation,” Adam Fisher, a partner at Bessemer Venture Partners, said in a written statement.
Sheel Mohnot of Better Tomorrow Ventures agrees, noting that his company was “baffled” at how many companies still used Excel for financial reconciliation.
“Fifinance teams are really underserved,” said Shaul. “Most of the reconciliation platforms out there are for banks.”
