Rather than casting a wider net, Chicago startup Paro has elected to lean on relationships it developed since its start to find success in a venture capital market that has dried up over the past year.
It seems to have paid off as the startup, which connects companies to finance professionals, completed a $25 million Series C funding round earlier this month.
The funding round was led by Top Tier Capital Partners, with participation from existing investors Madrona Venture Group, Revolution Ventures and Sierra Ventures.
"Top Tier is interesting because they are an LP in Madrona and Revolution, so the lead investor already had a preview to Paro and we knew him from Series B. So this was one of those relationships where he tracked Paro over time, and we reached the right level of growth and maturity for him to make a direct investment," Anita Samojednik, CEO of Paro, told Chicago Inno.
Paro uses artificial intelligence software to match finance experts with the most appropriate job opportunities. The startup has raised $67 million to date, including a $25 million Series B round that closed in 2021.
While Samojednik, the former president of Chicago-based Groupon International, admitted that being AI-based was "helpful" in getting the funding, it wasn't enough to secure the funding alone.
"I think the investors are somewhat picky in where they want to invest their money right now and they are looking for companies with good fundamentals that can be scaled," Samojednik said. "So for sure AI has been a helpful factor, but we still had to check all the other boxes as well."
She thought the disruptive nature of the business won over investors more than anything. Paro works with CPAs, bookkeepers, CFOs and more to give companies a new way to access demand finance and accounting expertise.
"There's a massive shortage of CPA talent, accountant talent, and I think that we are solving that problem," she said.
Samojednik did not disclose Paro's valuation in the latest funding round but said it was slightly up from its Series B as Paro did not not experience devaluation issues that have plagued other young startups.
She thinks being Chicago-based may have helped with that.
"We were not subject to the overheated valuations that was happening and so we feel we were fairly valued," she said.
