Fractional CFO for IoT companies
IoT P&Ls are mixed by construction. A single order routinely contains hardware sold at delivery, multi-year connectivity recognised over time, and a platform or data subscription on its own line. ASC 606 allocation across those elements drives how revenue reads, while warranty reserves, component inventory and supplier prepayments lock up working capital in ways pure-software operators never face.
Our work starts with disentangling the three revenue streams: hardware, connectivity and software or data margins reported separately, with installed base, attach rate, ARPU and churn surfaced as the operating metrics. From there we run the unit economics that matter for hardware-plus-recurring: payback on device subsidies, lifetime margin per connected unit, and the working capital intensity of scaling shipments.
Flow provides financial modelling, FP&A and startup CFO advisory to IoT companies across industrial and asset-tracking platforms, cellular and LPWAN connectivity providers, smart building and energy monitoring, fleet telematics and consumer connected devices.
KPIs to track for "IoT" startups
We're very 'KPI-driven' fractional CFOs, and we make sure to monitor the right metrics for your startup.
Devices connected
Active installed base
ARPU per device
Recurring revenue %
Hardware gross margin
Software / connectivity gross margin
Net revenue retention
Device churn
Attach rate (software to hardware)
Deferred connectivity revenue
Inventory days
Warranty / replacement reserve
Financial modelling for "IoT" startups
As fractional CFOs, we build KPI-driven financial models that are insightful and easy to maintain.
Financial modelling is both art and science - models must be robust, but also understandable, and useful for both internal planning and VC fundraising purposes. Hire a fractional CFO who knows how to handle both sides of the equation.
Three-stream revenue split
Hardware, connectivity and software or data revenue reported on separate lines with their own gross margin, recognition pattern and growth driver. Stops investors discounting recurring software margin because hardware revenue is dragging the blended number down.
ASC 606 bundle allocation
Single-order allocation across device, multi-year connectivity and subscription performance obligations with deferred revenue and contract liabilities reconciled monthly. Pre-empts the question every diligence asks about over-stated upfront revenue.
Connected unit unit economics
Device subsidy payback, lifetime margin per connected unit and ARPU expansion modelled per cohort and use case. Tells the board whether deeper hardware discounts to win deployments actually compound into better lifetime economics.
Installed base and attach rate
Installed base, software attach rate and device churn tracked by vintage and customer segment with ARPU progression layered on top. Surfaces whether the platform is genuinely monetising the installed base or just shipping more hardware.
Hardware working capital cycle
Component prepayments, inventory days, contract manufacturer terms and customer DSO laid out on one schedule to show cash absorption per incremental device. Tells the board how much funding the next 100k units will actually require.
Warranty and field-service reserves
Warranty, replacement and field-service reserves built from failure rate, return cost and remaining device life rather than a flat percentage of revenue. Gives the audit committee and the auditors a defensible number rather than a plug.
Founders and investors we've worked with
We've supported winning builders across IoT and beyond.
Hector
We acted as fractional CFO to Hector Aurumi, a Dubai-based specialist software house with AI/ML, IoT and data science expertise, providing confidential valuation guidance to the management team.
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Radtonics
We acted as fractional CFO and fundraising advisor to Radtonics, a Stockholm-based private LTE & 5G networks and edge cloud compute provider, preparing investor materials for an institutional growth round.
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Voereir
We acted as fractional CFO to Voereir, a Stockholm-based telco cloud and DevOps software provider, professionalising the finance function and supporting commercial planning across product, delivery and go-to-market.
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Dataprana
We acted as fractional CFO to Dataprana, a Miami-based data center developer and operator focused on crypto mining and AI / GPU compute workloads, building its bottom-up model and supporting an institutional growth round.
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TBô
We acted as fractional CFO to TBô, a Zurich-based tech-enabled DTC male underwear brand, building a bottom-up financial / operating model with cohort-level KPIs and positioning the company for its next venture round.
See moreRecent fractional CFO track record
See our fractional CFO and financial modelling experience across IoT and beyond.
Simple pricing
No hidden costs, no complicated long-term contracts. We understand how important flexibility is for IoT startups.
Per month
- Accounting / FP&A tech stack implementation
- Monthly financial statements and reporting pack
- Quarterly board pack with detailed financial analysis (with variance analysis vs. budget, relevant KPI observations etc.)
- Investor-friendly output
Per month
- Everything in Core, plus
- Operating model (via an online platform like Runway or Excel-based)
- Ongoing model maintenance, refining projections, burn/runway management
- Customer cohorts modelling, churn and retention analysis
- LTV / CAC, unit economics analysis
- Cap table management
Per month
- Everything in Grow, plus
- M&A / fundraising support; review of business plan
- Pitch deck preparation
- Investor approach strategy / list building
- Due diligence support and deal negotiation
- Valuation as required and free access to Multiples Pro
Packages shown are illustrative, final pricing is tailored to client requirements.
Explore our fractional CFO offering for similar verticals
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We provide fractional CFO services to companies operating across the entire tech.
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We help you scale by providing fractional CFO advice, through fundraising and a successful M&A exit.
VC fundraising for IoT companies
We help you prepare materials, reach out to investors in our extensive network, negotiate fair term sheets and structure the VC round.
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