#1 Other startups want to replace Excel - DataRails makes it better

Eyal Cohen, Oded Har-Tal  Didi Gurfinkel, DataRails  credit: Shani Tzidkiyahu
Eyal Cohen, Oded Har-Tal Didi Gurfinkel, DataRails credit: Shani Tzidkiyahu

DataRails, which tops "Globes'" 2021 startup rankings, comes to the aid of CFOs everywhere, integrating Excel with other systems to produce real-time analysis and clear visualizations.

DataRails’ potential customers more or less fit the following profile. They are CFOs at a company of several hundred employees, no more than 1,000. They have been working in the company for a good few years, probably a decade or more. Each month they are responsible for putting out important reports like profit and loss statements, budget and forecasts. They always create all these reports using Microsoft Excel.

Working on reports in Excel is far from perfect, but over the years our CFO has formulated methods, models and formulas to calculate wear and tear on machinery or the total mileage traveled by the company’s trucks. Almost no one else in the company understands these formulas. And yet, the night before the report is due, too often he stays at the office until late, correcting formulas, deleting and adding columns to the Excel spreadsheet, instead of studying the numbers themselves, as he would prefer to do.

Over the years, it has been suggested to him several times that all this work on the reports should be migrated to some shiny new financial planning and analysis software (FP&A). The has even tested some such options, but it has never worked. Entering all the organization’s models and formulas requires a great deal of implementation time and financial investment, after which he will be tied to the FP&A software provider who must be contacted for any small change. So, for years, he has stuck with Excel which, for all its shortcomings, is flexible.

What is unique about start-up DataRails is that it does not try to migrate that CFO or VP Finance to a new software. Rather, it upgrades working in Excel for them.

When you ask start-up entrepreneurs developing solutions for payroll, data analysis or task management to name their leading competitor, you usually hear the word "Excel" over and over again. Although Excel was launched sometime around 1985, thanks to its flexibility, the software is deeply entrenched in many an enterprise. In fact, some entrepreneurs looking for ideas for a startup are advised to simply walk around an office to find out which tasks are still being performed using Excel, and then develop a more efficient replacement. DataRails actually takes the opposite approach, which is what differentiates it.

Saving the world from Excel spreadsheets

DataRails ' story begins with Didi Gurfinkel, today the company's CEO and a former director at Cisco. During his time at Cisco, Gurfinkel was surprised to discover how huge multimillion dollar projects continued to be managed using Excel, sometimes in cumbersome, time-consuming ways. So, he decided to do something about it.

Through mutual acquaintances, Gurfinkel met his two DataRails partners: Eyal Cohen, one of the founders of Israeli company WalkMe, which went public this year on Nasdaq at a $2.5 billion valuation; and Oded Har-Tal, a former software developer at, among other places, conference call system company Polycom, (which closed its development center in Israel in 2015 and has since been renamed Poly). Cohen serves as COO at DataRails and Har-Tal as CTO. "The three of us are crazy about Excel, and that made for a good connection between us," laughs Cohen.

DataRails was launched in 2015 with the idea of saving the world from Excel spreadsheets, but for four years the company was in search of a direction and a specific niche. One product that DataRails worked on identified changes and errors in Excel spreadsheets for employees of various departments in a company. "We did a market survey and got positive feedback, so we built an MVP (minimum viable product) which was excellent. The problem was that no one bought it," says Cohen. "In retrospect, it could be that the issue of working with Excel wasn’t a big enough pain for most users in the organization. By contrast, Excel is really the financial department’s operating system, and every solution changes the employees’ lives dramatically."

DataRails' second attempt was a compliance product, intended to help banks and insurance companies comply with reporting standards. "These companies are frequently fined by regulators because they are not allowed to use Excel, and our solution, which has regulatory approval, could have reduced the fines. The problem was that selling to banks is a very complex processes that takes years. It was too big for us, "admits Cohen.

DataRails had its breakthrough in 2020 with the launch of its current product, designed for financial departments of medium-sized businesses. The DataRails solution automatically extracts data from various systems within the organization into a unified database in the cloud. The software then enables real-time analysis of the data in Excel, and also provides a dashboard offering clear visualizations.

"At the board meeting, the CFO will say that quarterly profits were $1 million, but when asked what made up that profit, they have to search the Excel file to find the breakdown by division. That CFO's answer to almost every question is 'I'll get back to you,'" Cohen says. "With our tool, they can double-click on the dashboard to see the distribution of profit by division, down to the individual transaction level, using data input from all systems in the organization."

Patents for reading Excel data

It all sounds very simple, but it requires a great deal of behind-the-scenes technology. DataRails has registered three patents on algorithms that can identify and analyze unstructured data from Excel and merge it with structured data from other systems within the organization to create a unified database. "The years when we developed Excel solutions contributed to our unique knowledge," says Cohen. "Aside from us, there’s no other company that knows how to take a complex Excel spreadsheet with text, formulas and numbers, and understand what is in each and every cell."

When it comes to ROI for DataRails customers, Cohen notes time-savings, error prevention, and the ability to perform many more analyses than ever before. "Hours of Sisyphean labor can be redirected to on-the-spot data analysis," says Cohen. "We turn the CFO into a strategic manager. Moreover, the CEO is our most satisfied customer; suddenly they can be updated on the company's data in real time instead of waiting till the end of the month. Consequently, our customer attrition rate is zero."

Finding the right niche has undoubtedly propelled DataRails forward. The company does not disclose profit and revenue data, and is content to point out that it serves hundreds of customers in a range of sectors, from the municipality of Somerville, Massachusetts, to network security company Forescout. In a previous interview, Gurfinkel estimated that by the end of 2022, DataRails would have 1,000 customers.

But DataRails’ funding rounds also tell the company’s story. For the first four years of its life, while searching for the right niche, DataRails received only $10 million in investment. This year, the amount jumped to $53 million thanks to two funding rounds held one after another, in April and June. DataRail's investors include Vertex Ventures Israel, Oren Zeev’s Zeev Ventures Fund, Vintage Investment Partners, and Dror Berman and Eric Schmidt’s Innovation Endeavors.

"Our real competition is the status quo"

Players in the FP&A software market include Adaptive Insights, acquired for $1.5 billion by Workday in 2018 and renamed Workday Adaptive Planning; Oracle, which acquired Hyperion for $3.3 billion in 2007; and Anaplan, which has a $8.8 billion market cap. However, these players appeal mainly to larger corporations, their solutions less suited to businesses with workforces of only a few hundred.

A closer DataRails competitor is New York-based startup Cube, which develops FP&A software for medium-sized companies. Cube, founded by Christina Ross, herself a former CFO, is smaller than DataRails and has raised $19 million. Like DataRails, Cube connects data from various systems in an enterprise, and allows users to view and work with it within Excel. Canada's Vena Solutions, which has raised $270 million to date, is also trying to streamline Excel for financial analysis.

Software review site Capterra has rated both DataRails and Cube a perfect score of 5 out of 5, compared with 4.3 for Vena. "All our competitors are developing similar products to interface with Excel, but their integration time is long and their costs are high. As a result, only a tiny percentage of our market segment, companies with up to 1,000 employees, have this software. So you could say that our real competition is the status quo," Cohen says.

Turning into a unicorn on the way to leading the market

Data Rail employs 140 people, of whom half are in Israel. Cohen says that a significant proportion does not have a classic high-tech background. "One of our staffers was a waitress and today manages four marketing people, another was a gym trainer and is now manages our sales development representatives. The advantage for both of them is that they’re English-speakers, which in Israel is considered a super power. Because our company sells a financial product, we employ many former finance people and accountants in customer management, sales and marketing positions. Understanding finance is very important in selling and implementing our product."

In addition to Israel, DataRails employs salespeople in the US, and remote development workers from a number of Eastern European countries. "That’s because it’s very, very difficult to recruit workers in Israel. It's even hard to catch people on the phone and get them to agree to talk to recruiters," says Cohen. To deal with this problem, DataRails launched a billboard campaign on the Ayalon highway last summer, which poked fun at the flood of unicorn company ads appearing over the past year. "We’re on the way. Join the journey", it stated in English.

Plans include expansion to slightly larger enterprises and to the European market. "We will be a unicorn and pretty soon," predicts Cohen. "The goal is to be a market leader, as QuickBooks, which has millions of customers, is for accounting."


  • Business: Financial planning and analysis in Excel for medium-sized organizations
  • History: Founded in 2015 by Didi Gurfinkel (CEO), Eyal Cohen (VP Operations) and Oded Har-Tal (CTO)
  • Stats: The company, which employs 140 people, has raised $53 million, including from Vertex Ventures Israel, Oren Zeev’s Zeev Ventures Fund, Vintage Investment Partners, and Dror Berman and Eric Schmidt’s Innovation Endeavors.
  • Competition: The most prominent competitor is Cube, a New York-based start-up that also develops Excel-based financial planning and analysis software for medium-sized companies. Cube, founded by Christina Ross, a former CFO, has raised $19 million.

Published by Globes, Israel business news - en.globes.co.il - on December 7, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.

Eyal Cohen, Oded Har-Tal  Didi Gurfinkel, DataRails  credit: Shani Tzidkiyahu
Eyal Cohen, Oded Har-Tal Didi Gurfinkel, DataRails credit: Shani Tzidkiyahu
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