Cove.Tool Financial Model
Enterprise/Security Startup Financials (Free Excel Download)
Cloud platform automating building performance analysis and design-decision collaboration for architects, engineers, owners, and contractors.
professionals from Deloitte
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About this model
Cove.Tool automates building-performance analysis and design decisions for architects, engineers, owners, and contractors. The platform replaces a fragmented, specialist-led process with collaborative software that can analyse design choices much faster.
The company serves several stakeholders on the same building project and has reported more than 7,000 users across 22 countries. Its cohort data indicates net negative churn, while gross margins improved toward the 85% to 90% range as the software scaled.
The model builds subscription ARR from seats and projects, then layers expansion as more stakeholders and analysis workflows are adopted. New users, ARPU, retention, infrastructure costs, sales spend, and hiring determine revenue, gross profit, and cash runway under different growth cases.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
About Cove.Tool
covetool.com
How to build a detailed financial model for Cove.Tool
A complete walkthrough of the business, drivers, and assumptions behind the downloadable Cove.Tool model - distilled from its pitch deck and publicly available information.
Product & value proposition
- Platform replaces a fragmented, consultant-heavy, 6-week manual design-decision workflow (file transfer, email, voicemail, meetings) with a single automated tool.
- Collapses 40–80 hours per analysis type (using specialist tools: EnergyPlus, Radiance, OpenStudio, OpenFOAM, Ladybug, Honeybee, Daysim, Therm & Window, etc.) down to 15 minutes for all required analysis.
- Reduces a 6-week design revision cycle to 1 hour per revision.
- Five platform principles: Automation, Collaboration, Data-Driven Design, Cost Optimization, AI.
- Patent held by COO Patrick Chopson for the cove.tool geometric solver.
- Users: Architect, Mechanical Engineer, Owner, Contractor.
Revenue model
- SaaS subscription (ARR model, both "Billed" and "Booked" ARR tracked).
- Channels: Direct (web platform at www.cove.tools). Channel partners not mentioned.
- Expansion revenue evident from cohort data showing net negative churn - customers expand spend over time.
Traction & metrics
- 7,000+ users across 22 countries.
- ARR "Fast Growth" with YoY % and MoM % growth shown - exact figures redacted in the deck.
- ARR (Billed) + ARR (Booked) stacked bar chart covers Jan 2019 – Dec 2020; visual shape shows consistent acceleration through the period.
- Cohort retention: net negative churn confirmed (exact % redacted); sample cohort table shows many cohorts exceeding 100% of initial ARR by month 8–12 and some reaching 200–258% by month 12–19.
- Gross margins: started ~20% in Q1 2019, rising steeply through Q3–Q4 2019 (40%–70% range), stabilising at ~85–90% by Q2–Q3 2020. Exact quarterly average % redacted.
- 5-year ARR target: $1.2B.
Unit economics
- Gross margin: visually ~85–90% by Q3 2020 per slide 11 chart axis, trending upward from ~20% in early 2019.
- Net negative churn: confirmed as a metric, exact rate redacted.
Competition / moat
- Competitive alternatives named (implicitly as displaced tools): EnergyPlus, OpenStudio, Radiance, Daysim, OpenFOAM, Honeybee, Ladybug, Butterfly, Therm & Window - all single-purpose, consultant-operated, requiring 40–80 hours per analysis type.
- Moats cited:
- Patent on geometric solver.
- Data flywheel: "Data collection increases predictive and generative abilities of the platform."
- Network effects implied: collaboration platform spans 8 stakeholder types (owner, contractor, financing, sub-contractor, supplier, manufacturer, permitting, architect, engineer).
- Speed advantage: 15 min vs. 40–80 hrs per analysis type.
Team & funding ask / use of funds
- Sandeep Ahuja, CEO - Architect / Energy Modeler; founded leading simulation consulting firm in Southeast US; Forbes 30 Under 30; Master's Georgia Tech; UN speaker.
- Patrick Chopson AIA, COO - Licensed architect; 16 years consulting + architecture; published journal author; patent holder (geometric solver); Master's Georgia Tech.
- Daniel Chopson, CTO - Full-stack engineer, 15+ years; built world's fastest daylight simulation.
Recommended financial model
- Archetype + why: SaaS ARR model with seat/project-based expansion. cove.tool is a pure subscription business with net negative churn, multi-stakeholder adoption, and a data moat - a classic bottoms-up SaaS ARR build is the right frame. Revenue = seats × ARPU, with cohort-based expansion layered on top. Gross margins trending to ~85–90% further support SaaS treatment (infrastructure costs are the primary COGS).
- Forecast horizon & granularity: 5 years (matching stated vision horizon) monthly for Years 1–2, quarterly for Years 3–5. Base year = 2020 (most recent period in deck).
- Key drivers & assumptions:
| Driver | Value / basis |
|---|---|
| Starting ARR | shape visible in slide 09 but exact value redacted - use as blank input cell to be filled when real data is provided |
| YoY ARR growth rate | redacted - placeholder; 80–120% YoY for Year 1 based on visual chart acceleration and AEC SaaS comps at this stage |
| MoM new ARR adds | derived from YoY target; model as steady monthly new bookings with seasonal softness in Q3 (summer AEC slowdown) |
| Starting user count | 7,000+ users |
| Net revenue retention (NRR) | net negative churn confirmed but % redacted; model at 110–120% NRR as base, consistent with cohort table shape |
| Gross margin % | ~85–90% visible on slide 11 chart by Q3 2020; use 85% as Year 1 base, expanding to 88% by Year 5 |
| R&D spend | 25–35% of revenue; founders are technical, no hired team visible beyond 3 founders |
| G&A | 10–15% of revenue at current scale, declining to 7% at scale |
| 5-year ARR target | $1.2B - serves as the bull-case anchor; implies ~5–6 year CAGR of very high double-digits depending on starting ARR |
- Scenarios (Base / Bull / Bear - which variables flex):
- Bull: NRR 125%, new logo growth at top of range, ARPU expansion as platform moves up-market to enterprise AEC firms.
- Base: NRR 115%, steady logo growth, ARPU flat.
- Bear: NRR 100% (logo churn offsets expansion), slower new logo adds (AEC macro headwinds), ARPU compression as price sensitivity increases.
- Required sheets / outputs:
- Assumptions - all input cells in one place (starting ARR, growth %, NRR, ARPU, headcount ramp, COGS %)
- ARR Waterfall - monthly: beginning ARR + new bookings + expansion − churn = ending ARR
- Cohort Model - month-of-cohort expansion curve (seed from slide 10 shape, populated once real data provided)
- P&L - Revenue, Gross Profit, S&M, R&D, G&A, EBITDA; monthly Y1–Y2, quarterly Y3–Y5
- Headcount Plan - by function (R&D, S&M, G&A); feeds OpEx
- Cash & Runway - operating cash burn/generation; flag break-even month
- KPI Dashboard - ARR, MoM growth %, NRR, gross margin %, burn multiple, magic number; chart against $1.2B 5-year target
Frequently asked
Is the Cove.Tool financial model free?+
Yes. The Cove.Tool model is a free Excel (.xlsx) download with live formulas. Sign up with your email and the workbook is yours to keep, review, and edit.
What's included in the model?+
A 5-year monthly forecast with P&L, cash flow and runway, valuation (exit multiple plus a DCF cross-check), MOIC/IRR returns, and unit economics, with live formulas throughout.
How was this model built?+
It was built from Cove.Tool's pitch deck and publicly available information, then structured to investment-banking standards as a fully editable Excel model.
Can I change the assumptions?+
Yes. You can change assumptions and the live formulas will recalculate in the downloadable Excel model.
Have more financial modelling questions? Contact us
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