2016 IPO Prospects: Anaplan Getting Ready to Go Public

According to a report by Grand View Research, the global ERP software market is estimated to grow 7% annually over the next six years to $48.22 billion by the year 2022. The growth in the industry is estimated to be driven by implementation of ERP software in the medium enterprises and the development and implementation of cloud-based ERP software. Anaplan is a cloud-based planning and modeling company that is now looking to go public.

Anaplan’s Financials

San Francisco-based Anaplan was founded in 2006 by IBM alumnus Michael Gould. While working at IBM, Michael realized that there was a gaping demand for the next generation of planning software in the market. He locked himself in a barn in the UK, began coding and in the next four years came up with the core technology that was the basis for Anaplan. Unlike other ERP offerings, Anaplan works on a Hyperblock platform that integrates a cube, columnar, and cell-based database together to enable organizations to plan and recalculate complex business models at faster speeds. Anaplan’s planning solution is best known for its ease of use. It works as simply as a spreadsheet, but is much more powerful than that as it offers customers the ability to create dynamic models based on multiple variables and collaborate while building the plans.

Anaplan does not disclose detailed financials. Some market reports suggest that the company was earning $10 million in revenues in 2012 and grew to earning $10 million per quarter in 2013 and $10 million per month in 2014. In my interview with its CEO Fred Laluyaux in 2014, he had said that Anaplan was close to $100 million in bookings that year. More recent reports continue to reaffirm high-paced growth. Revenues for the fiscal year from February 1, 2015 to January 31, 2016 have grown 100% over the year with customers growing 75% to over 430 and user base increasing 90% to 70,000. Its latest profitability figures are not known, but Anaplan was unprofitable in 2014.

Anaplan is venture funded so far with $240 million in financing raised from PremjiInvest, Baillie Gifford, Brookside Capital, Coatue Management, Founders Circle Capital, Harmony Ventures, Sands Capital Management, Salesforce Ventures, Sands Capital Ventures, DFJ Growth, Shasta Ventures, Meritech Capital Partners, and Granite Ventures. Its latest round of funding was held in January this year, when it raised $90 million in a pre-IPO round at a valuation of $1.1 billion. Prior to the round, Anaplan had raised $100 million in May 2014 at a valuation of $675 million. Anaplan plans to use the funds from the latest round to expand its presence globally and for product development. Now that Anaplan has achieved its Billion Dollar Unicorn status, the company is looking to go public.

Anaplan’s Improved Offerings

Anaplan meanwhile continues to improve its market offering. Last month, it released a new version of the Anaplan App Hub that provides users with the ability to find and deploy planning apps across the entire enterprise. The move is part of Anaplan’s plans to increase third party app availability on its platform. Anaplan wants developers to build pre-packaged apps on its platform. The newly designed Anaplan App Hub will offer organizations access to a community focused on business planning solutions and more than 120 industry-tailored apps.

Anaplan also relies on its impressive partner program that allows organizations to access resources from big names such as Deloitte, Accenture, PwC, OpenSymmetry, and Akili. Recently, Anaplan released a new partner portal that will allow its customers access to more than 100 global partners and allow them to download Anaplan sales tools, marketing resources, and branding guidelines, create and submit business plans, register new leads, track open opportunities, monitor pipelines, invite colleagues, manage Anaplan roster and certifications, maintain company profile, and access Anaplan’s on-demand Learning Center.

It has also expanded its planning capabilities within HR with the release of a portfolio of workforce planning apps. The new workforce planning app will provide HR leaders with access to workforce planning tools such as the ability to plan for headcount, skills, retention, and recruiting. Additionally, the app will include headcount and payroll planning, onboarding planning and workforce optimization.

Unlike other major players like SAP, Oracle, and IBM which migrated from legacy on-premise offering to a cloud-based offering, Anaplan began its life on the cloud and is more nimble and doesn’t have to focus efforts on supporting a pre-packaged planning solution. Additionally, Anaplan has received backing from other cloud market leaders including Salesforce and Workday and has built integrations for both of them. It is no wonder then that Anaplan has seen the strong growth that it claims.

This segment is a part in the series : 2016 IPO Prospects