Posted on Thursday, Oct 8th 2015
According to a Forrester report, the public cloud market is expected to reach $191 billion by 2020, from $58 billion in 2013. Cloud applications, projected at $133 billion in 2020, are leading this growth; cloud platforms will generate $44 billion in revenue by 2020; and cloud business services will come in at $14 billion. Billion Dollar Unicorn Apttus is one of the many startups to benefit from the growth in the cloud applications market.
Apttus’ Journey and Offerings
San Mateo, California-based Apttus is a Salesforce App Cloud-based contract management software company. It was founded in 2006 by Kirk Krappe, Neehar Giri, and Nathan Krishnan. Kirk and his two co-founders had earlier done a venture-funded startup called Nextance. Nextance was an enterprise software company providing contract management software. It raised $60 million in venture capital, but eventually failed. They then decided to take their domain knowledge and start Apttus as a cloud-based contract lifecycle management software company, which later evolved into a configure price quote solution to help companies manage and personalise their sales contracts. Its applications include Quote-to-Cash Intelligence (Analytics), E-commerce, Configure Price Quote, Renewals, Contract Management, X-Author, and Revenue Management.
This time, they decided to take no venture capital. They decided to build the company on Salesforce.com’s Force.com platform, which kept the development costs low. It was particularly successful with overseas users and within a couple of years, shot to $5 million in revenue.
By 2013, Apttus had over 130 employees, $50 million in revenue and customers such as Google and Delta Airlines, and it was clearly a leader in the Quote to Cash management market. It currently serves over 300 customers in 50 countries and has 900 employees at its offices in San Mateo, Atlanta, Bozeman, Chicago, Japan, London, Sydney, and Ahmedabad, India. As of August 2015, the company had 500,000 users in 50 countries, and revenue was growing 60% annually.
Apttus’ applications work closely with Salesforce users as they extend the functionality of the Salesforce CRM platform. Salesforce users who land customers use Apttus apps to generate price quotes, negotiate contracts, and manage fiscal elements of the customer relationship as it develops. So far, Apttus has signed up only 1% of Salesforce’s top 20% of customers. That means there is a lot of scope for additional growth.
Apttus was bootstrapped without external funding for seven years. According to Gartner, Apttus is estimated to be looking at a $41 billion market opportunity. The company first raised a $37 million series A round in September 2013. This year, it has raised an additional $149 million in two rounds, with the latest round valuing them at over $1 billion.
Its investors include Iconiq Capital, K1 Capital, Kuwaiti Investment Authority, and Salesforce Ventures. It plans to use the funds to create “new business solutions and services” in fields such as manufacturing, life sciences, financial services, and telecommunications.
Apttus has reached a size where it can consider an IPO in the near future. However, analysts believe that it could also be an acquisition target for a larger enterprise-software company.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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