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Powdr wants to help businesses see around financial corners

Financial modelling is key to the success of any substantial business. And yet a lot of the time, these models just aren’t very robust.

That’s what Joe van Gelder found when he worked in banking.

“You'd find that lots of the information you'd get from your customers was of poor quality. You wouldn't be able to follow it through. You'd find these models that were hung together by Blu Tack and silly string, and they would fall apart very quickly.”

Sure, there are consultants who can come up with a better model for a large fee, but these models don’t grow with the business, so they’re very much a one-shot solution. 

And if you’re a bank trying to welcome a new client, saying “you have to pay tens of thousands of pounds for a fancy spreadsheet you can only use once” isn’t a great onboarding experience.

This is a problem van Gelder knows well, as he also spent time as a specialist accountant building precisely these kinds of models.

Now van Gelder has co-founded Powdr, a startup that offers software to build financial models that grow with a business, rather than breaking after use.

“Businesses change, in general, month to month. And that's the reason why these Excel-based models break. Our software makes it so that you can change anything, and the integrity of the model holds still,” he says.

“The debits and credits, the accountancy, the hard bit of the maths, still retains all the way through, regardless of what happens in your business, either in terms of numbers changing, or in terms of actual structural changes. 

“You can put them through knowing that the system automates the accountancy and the maths that you would otherwise have to have hired a professional to hook up in the background.”

How it works

Powdr will typically be used initially by a financial professional contracted to work with a business.

The software starts by pulling historical financial data from an online accounting platform like Xero, QuickBooks, or Sage. Then it forecasts each aspect of the financials to give the business an output of what it might look like into the future.

What this looks like exactly is informed by questions the professional asks the business about their strategy.

Once a model has been constructed, the business can buy a subscription from Powdr to continue using it. 

The financial professionals who initially build the model don’t pay for it. They act as a useful route to market for Powdr, as they are incentivised to use the software because it saves them so much money as they do not need someone else to do the work for them.

“Effectively, our tool is a productisation of my consultancy, and it's quite a sort of a really specialist area of accountancy that not many people do,” van Gelder explains.

The story so far

Van Gelder says he honed his craft in this space during his time at consultancy firm AlixPartners, building models for large companies with revenues in the hundreds of millions. Eventually, he left to set up his own consultancy, serving “mid-market” businesses with revenues between £5 million and £200 million.

“Each of these projects takes about six to eight weeks to do. I'd end up doing two or three at a time. So over a six year period, I did hundreds and hundreds of models across different businesses and sectors,” he says.

“The problem with all of that is that it's reliant on me, so it's not scalable. I just became an expensive consultant dressed up in a different way.”

And so van Gelder teamed up with software developer Stephen Foster to build something better.

Powdr launched a year ago. Since then, van Gelder says the startup has worked with 25 businesses, including helping three pass audit by proving they’re a going concern, an important milestone for some companies.

He says they’ve also helped two businesses raise equity investment and a further two restructure their debt. They’ve even assisted with an M&A process.

With the startup now a team of five, Powdr itself is still very hands-on when it comes to delivering output from the software, although van Gelder says a couple of accountants are using it. Increasing the software’s automation so it is more self-service for end users is a priority for the team in the coming months.