Runway wants to make financial forecasting dead simple

Siqi Chen was a year out of college when venture capitalists handed him millions of dollars to carry out his startup idea. The problem? Chen, a trained engineer, couldn’t read a complete financial statement. 

“I think that’s basically the default experience of most tech founders — most of us don’t know the first thing about business,” Chen, a three-time founder himself, told 500 Global in a recent interview. “We’re good at product or code or something, so we focus on that, and we outsource the finance side to someone else. But if you think about it, that’s sort of crazy. Like literally, we’re supposed to be building businesses.” 

Out of what Chen described as a “deep insecurity about not knowing how a business works,” in 2020, his latest startup Runway was born. 

Similar to how Canva (a 500 Global portfolio company) and Figma have built consumer-friendly design tools, Chen and his team at Runway want to make financial planning and modeling easier for employees across departments. And it’s not just tracking how much time a startup has left before it runs out of money, as its name, Runway, might suggest. Chen said his no-code finance platform allows users to “easily model and create plans” around almost any business metric. 

“If you can have it in Excel, you can have it in Runway,” he said.

Increasing access to financial information within companies could have important consequences. For one, Chen said when employees have a better understanding of their company’s business, they have more context into why leaders make certain decisions. And that context, he said, can lead to better overall job satisfaction. As Chen put it: “You’re going to be happier if you understand why you’re doing what you’re doing and the impact that you can make.” 

Chen, a former VP of Growth at Postmates, also said he’s excited to see how more financial transparency will help guide internal product decisions. 

“We want to live in a world where an engineer can say, ‘If I work on this feature instead of that feature, here is the impact on our margin and our growth 18 months from now,’” Chen said. “You can’t imagine that world today because the tools aren’t good enough.”

To help with its lofty goals, Runway announced its latest round of funding this week — a $27.5 million Series A led by Initialized Capital. (500 Global has participated in Runway’s previous raises.) With the funding, Chen plans to double his 22-person team within the year, amongst other things. 

“It’s actually an evergreen market,” Chen said, when asked if the current venture environment has prompted more tech companies to pay closer attention to their finances. “In good times — when you have more money and you’re spending more money — you want visibility. And when things aren’t going well, you want even more visibility.”

Still, the serial entrepreneur isn’t shy to talk about the difficulties in building Runway, which scrapped its original product after one year and started over with a different approach. He also pushes back on the idea of an overnight startup success, knowing how long it really takes to get a company off the ground. 

“It’s like three-and-a-half to five years to get any semblance of traction, but people on the outside might just look at something and say, ‘Oh yeah, that works,’” Chen said. “It’s really hard if you didn’t go through it to really imagine what three-and-a-half years of just not knowing is like.” 

Now though, according to Chen, with its latest influx of capital and over 50 corporate customers using its early access product, including AngelList, Superhuman, and Stability AI, the path forward for the Runway team is becoming increasingly clear. 

“A spreadsheet is actually a piece of software and that software is a simulation of your business. It’s a game engine. It allows you to time travel into the future and understand the consequences of decisions you make today,” Chen said. “That’s what we’re trying to make accessible.”