Maybern, co-founded by Ashwin Raghu and Ross Mechanic in 2021, aims to address the intricate accounting challenges faced by investment firms managing assets within the private capital market—a sector worth approximately $15 trillion encompassing private equity, private credit, venture capital, and real estate investments. Investment firms frequently engage in customized agreements requiring complex calculations for management fees and profit-sharing, a task that currently relies overwhelmingly on Excel spreadsheets. As noted by Mechanic, the CEO of Maybern, this outdated system leaves room for significant errors, which can have severe financial repercussions. The startup’s software seeks to automate these calculations, enhance accuracy, and expedite reporting, creating a more efficient workflow for accounting teams at investment funds.
The funding landscape for Maybern is promising, as evidenced by the $14 million investment led by Primary Ventures in May 2024, raising the company’s valuation to $80 million and bringing total funding to $26 million. The time is ripe for technology solutions in this arena given the exponential growth of the private capital market over the past five years, which has not been matched by corresponding upgrades in accounting systems or technical infrastructure. Emily Man, a partner at Primary Ventures, highlights the stark gap between the existing software tools and market needs, particularly against a backdrop of a dwindling accountant workforce. This environment fosters a unique opportunity for Maybern, whose solutions are increasingly in demand as firms look to adapt and enhance operational efficiency in their accounting processes.
The inspiration for Maybern emerged out of Mechanic’s experience while working at fintech company Cadre, where he encountered persistent accounting issues within private capital management. Mechanic realized the inefficiencies when he saw a five-person team struggling with management-fee calculations and capital calls, uncovering errors in a voluminous Excel environment. The realization that 95% of these calculations remained tethered to Excel at even the largest private equity firms underscored the need for a dedicated solution. Mechanic and Raghu dedicated two and a half years to developing Maybern’s software, which automates the complex calculations inherent in fund management, including management fees, capital calls, and profit distributions.
Maybern’s target market consists of investment funds managing between $2 billion and $20 billion in assets. One early adopter, Gauge Capital—a Texas-based private equity fund with $3.5 billion in assets—has recently begun integrating Maybern’s software to streamline its accounting processes. The varying contracts that Gauge maintains with hundreds of investors necessitate unique calculations of management fees and tailored capital call procedures. This complexity showcases the need for precision, as illustrated by compliance concerns raised by regulatory bodies such as the SEC when firms inaccurately compute management fees or fail to fully disclose conflicts of interest. The accountability concerning the accuracy of these calculations is paramount, given the potential for costly repercussions highlighted by recent SEC enforcement actions against firms like Insight Partners.
Onboarding with Maybern is a labor-intensive endeavor, as firms must import extensive data, including investment contracts and Excel spreadsheets, to effectively utilize the software. Gauge is expected to start deploying Maybern’s calculations for its first quarterly reports in 2025, which may save significant time for its accounting staff. The efficiency gained from using Maybern’s automated tools can free analysts from tedious number-crunching, allowing them to refocus on higher-level analyses and decision-making—a key benefit that the company aims to provide. Maybern’s business model of charging a fee based on assets managed offers a scalable revenue approach, and with several clients already on board, the projected annual revenue could range between $2 to $3 million.
Looking ahead, Mechanic envisions expanding Maybern’s capabilities beyond just automating accounting calculations. The plan involves offering sophisticated analytical tools that enable firms to run projections and simulate various scenarios, thereby enhancing strategic decision-making. While Maybern has made strides, it faces considerable challenges operating within a space where funds have not traditionally adopted software solutions. Pre-existing players in the market, such as Yardi and Juniper Square, provide general ledger services but typically do not cater to the intricate calculation needs tackled by Maybern. Striking a balance between managing complex client requirements without devolving into bespoke consulting work remains a critical challenge for the startup.
As Maybern continues to navigate the unique requirements of investment funds, it must remain attuned to the broader market to build features that are widely applicable rather than solely focused on individual client needs. This focus on creating a versatile and robust solution can help Maybern stand out amidst existing software competitors. Mechanic understands the necessity of saying no to overly specific demands that do not align with the overall vision of the product, suggesting a strategic approach to growth that prioritizes developing scalable and efficient solutions for the accounting challenges unique to the private capital industry.
