Sapience Analytics is the creator of an enterprise-class solution designed to increase productivity and create “automated work visibility” across the enterprise hierarchy – with no added managerial responsibility. Within two years of its release, Sapience has crossed $1 million in annual revenue and has scaled to more than 50 installations and 50,000 users. Sapience has recently been selected by NASSCOM as India’s Top 10 Emerge Product company for 2013. It has also been recognized as one of India’s fastest growing enterprise software products by IDG Channel World (50 Hot Companies, 2013); NASSCOM (Lead 10, 2013); and Red Herring (Asia Top 100 technology start-up, 2011).
Sapience intends to transform delivery output and capability in companies with employees dependent on the use of computers, allowing them to achieve up to a 20% gain in work output. By supporting automated deployment and upgrades, it connects to an organization’s existing internal applications to create maximum benefit without additional effort.
Sapience Analytics, originally named InnovizeTech Software, was founded in 2009 by four serial entrepreneurs, ShirishDeodhar, Madhukar Bhatia, Swati Deodhar, and Hemant Joshi. After several years of technology and management experience at global software companies, the co-founders strongly felt that the future of Indian IT belonged to product ventures. In 2008, they decided to build a solution to address the productivity and value proposition of a remote subsidiary and for teams at outsourcing vendors.
The founders were surprised to note that they had no competition in the space of “automated enterprise effort visibility.” The company’s closest competition was from employee monitoring tools such as RescueTime, ManicTime, oDesk, and Cyclops 360 that track user time on applications and websites. Absence of work visibility makes it difficult to increase work output, and hence productivity. You can only improve what you can measure, say the founders. This is where Sapience scores, but the main challenge it faces is to highlight the fact that Sapience is not an employee monitoring tool; rather, it is intended to provide insight into the quality and efficiency of collective work.
In late 2010, the first release was picked up by companies such as IdeaS (SAS subsidiary), Excelize, and EnVenture. These were all 75- to 150-user license deals, and the next step was to persuade larger (i.e., 2,500+) employee companies. In mid-2011, senior management at Zensar and KPIT gave Sapience its initial break into the medium sized segment. By early 2012, the company got its largest license deal with Tech Mahindra, a top 10 Indian IT company. A large order from another top 10 IT company followed not long afterward.
From a basic implementation for smaller customers, Sapience today has evolved into a product with advanced work pattern analytics that can be transformational for a large business. Key target verticals are IT services, global software companies, KPOs and non-voice BPOs, engineering services, infrastructure management services, and back offices of BFSI and retail firms.
Sapience Analytics has an addressable market of $600 million in the IT sector, based on a $100 per user model. The total addressable market (inclusive of ITes, engineering services, KPOs and back-offices in BFSI and retail) is worth conservatively at least three times that, at $1.8 billion.
The company has a revenue run-rate of $2 million. It became cash flow positive in the fiscal year 2012-13 and had revenue of over $1 million.
After achieving significant growth in the Indian market, Sapience Analytics is now looking to enter the global market. The founders feel that in facing the challenge of increasing organization productivity, most companies have exhausted options like outsourcing automation of key functions and process improvements. The way forward for such companies is to look at increasing individual and team productivity. The transition to mobile devices like tablets and smartphones also creates another opportunity for Sapience which supports seamless visibility and analytics across all such devices. However, employee privacy laws are stricter in Europe and the U.S., and Sapience is designing a new version to address these concerns.
The co-founders bootstrapped for the first one and half years, using their own money. Then in July 2010, they received $350,000 from the Indian Angel Network, and in November 2011, they received another $1 million in Series A funding from Seed Enterprises. The company currently has cash in the bank, but the founders are considering additional funding for its global expansion plan. An effective U.S. sales presence will cost at least $1 million each year. Sapience says its ideal investor would be a VC or a technology partner from the U.S.
Sapience says its focus for the next couple of years is to achieve the 500,000 user mark. Regarding an exit, it says “While we are not thinking about an exit, this is obviously one of the options for any technology business. An M&A can be considered if a strong global enterprise approaches us with the shared objective of making Sapience the best enterprise effort and productivity software, and the business terms meet the approval of the board and investors.”
This segment is a part in the series : 1Mby1M Deal Radar 2013