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Xactly Banks on AI for SPM

Posted on Wednesday, Oct 2nd 2019

According to a recent report, the global sales performance management (SPM) market is estimated to grow 17% annually over the next few years to become a $9.34 billion industry by 2023. San Jose-based Xactly is a leading player in the market that was acquired by Vista Equity Partners in 2017 after it went public in 2015. Despite the upheaval, Xactly has continued to deliver strong growth.

Xactly’s Financials

Xactly was set up in 2005 by Christopher Cabrera and Satish Palvai with the intention of building a SaaS model instead of the traditional license-based model in the field of compensation. Today, Xactly is a leading cloud-based, multi-tenant provider of enterprise-class, cloud-based, incentive compensation solutions for employee and SPM.

Its solutions allow organizations to drive better employee behavior and performance while ensuring growth in margins, efficiencies, and achievement of strategic goals. It has also expanded its footprint into services like territory management and commission expense forecasting. Through its tie-ups with Salesforce, it is also able to offer a CPQ (configure, price, quote) solution to its customers.

Xactly was initially venture funded, and had raised $90 million from investors including Illuminate Ventures, Bridgescale Partners, Rembrandt Venture Partners, Outlook Ventures, Salesforce Ventures, Glynn Capital Management, Alloy Ventures, Bay Partners, Cheyenne Capital, and Spinner Asset Management. In 2015, it listed on the NYSE under the ticker XTLY and raised $56 million at a valuation of $304 million. In 2017, Vista Equity Partners acquired Xactly for an estimated $564 million and took it private again.

Xactly does not disclose its detailed financials. In 2017, when it was acquired, it had recorded revenues of $95.5 million with a net loss of $16.9 million. Its current annual revenues are estimated to be $110.4 million. Xactly’s recently released reports reveal that it continues to witness strong growth. It closed last fiscal year at record high levels, calling it the strongest performance in its 14-year history. It grew its customer base to 1,600 in 2018.

Xactly’s Acquisitions

Xactly has delivered some of that growth through acquisitions. Last year, it acquired Obero and Ops Panda. Obero was another SPM company set up in Ontario, Canada. Its SPM solution supported the end-to-end sales life cycle by integrating Sales Planning and Forecasting, Incentive Compensation Management, and Sales Profitability Management in a single application. Terms of the deal were not disclosed. Obero was privately held and did not disclose its funding and financial details. Its annual revenue is estimated to be $13.5 million.

Later last year, Xactly also announced the acquisition of AI-based SPM player OpsPanda for an undisclosed sum. Palo Alto-based OpsPanda helps organizations find and fill gaps in their sales planning activities. Its SaaS application helped sales, operations, and finance teams to define and rationalize the resources needed to meet and exceed sales targets using AI and ML tools. Xactly planned to integrate OpsPanda’s AI capabilities to provide its customers with a data-based and a do-it-yourself solution to support ongoing and strategic sales planning, streamline integration of sales planning and ICM processes, identify and manage sales capacity, and align corporate revenue objectives with sales and quota planning. OpsPanda had raised $6 million prior to the acquisition. Its annual revenue is estimated to be $2.2 million.

Xactly is already focused on leveraging AI tools in the area of SPM. It recently announced the availability of its expanded SPM platform, which now does more than just automating commission and compensation processing. It integrates sales planning, quota and territory management, incentive compensation and real-time data tools into the new platform to offer a comprehensive solution on the market. By leveraging AI across planning, execution, and optimization, Xactly can provide companies with the insights needed to retain talent and drive growth.

Gartner believes that Sales Performance Management solutions help organizations save 3-5% in compensation expenses. It expects 30% of all B2B companies to employ AI to augment at least one of their primary sales processes by 2020. Xactly appears to be on the right path by implementing AI-based offerings and improving its product options. It was recently named a leader in Sales Performance Management by Gartner for the sixth consecutive year. Unfortunately, being privately held, its financials are kept under covers, making it difficult to comment about its growth path and trajectory.

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