The Office of the CFO

In a global marketplace where change is now the norm, the historically rigid Office of the CFO is shifting to a more fluid role where CFOs must become more strategic. With this, new key challenges are facing CFOs including: labor shortages, cash flow forecasting, supporting remote work, hiring, supply chain, and more. The ability of CFOs today to use software to drive efficiencies and reduce operating costs is an important key to company development. Most software offered in the broader CFO suite is disruptive and creates substantial ROI for their users, while enhancing productivity. The modern CFO needs to be completely in touch and connected with their firm, as they take on a bigger role in driving company success.

As organizations undergo digital transformation, the role of the CFO has expanded significantly beyond traditional functions. There is a growing emphasis on leveraging disruptive software solutions to enhance CFO operations. Comprehensive CFO platforms today offer efficient operations and sharper insights, crucial for supporting strategic enterprise decisions. While this shift in Office of the CFO technology continues, it has created a significant opportunity for growth stage technology companies with disruptive CFO-related software to win market share. This will lead to heightened M&A activity as private equity and large strategics invest more heavily in the future of the space.

Office of the CFO M&A deal volume hit an all-time high in '21 with 830 deals, almost double 2019 levels. Activity remains healthy today, dipping only slightly despite the macroeconomic headwinds that have slowed overall tech deal making. Transactions have stayed strong in '24 with an estimated $25B in total value – the most notable of which being Hg's acquisition of Auditboard for $3B in May and Francisco Partners' acquisition of Jama Software for $1.2B in March. Private investments in the CFO suite were responsible for $13.2B in value across 266 transactions in '21, but '24 has slowed with macro instability and the public market correction. One notable investment in Q2 '24 was Stripe's capital raise of $694M. While interest rates remain high in 2024, the operational performance of many SaaS companies has driven market improvement. This is on the backs of high valuations for the "haves," while the "have-nots" are seeing significant disparity in valuations. While market dynamics have shown a clear change from 2021 funding, record levels of dry-powder will force the deployment of capital in '24 with the expectation of the return of the larger deals at 2019 valuations.

With over 500 companies identified in AGC's Office of the CFO landscape across Financial Management and Control, Strategic Planning and Budgeting, and Operational Efficiency and Oversight, the industry is large, rapidly growing, and multifaceted.