2018 IPO Prospects: What is Adaptive Insights’ Game Plan?

According to Persistence Market Research, the global corporate performance management (CPM) market is expected to grow to $3.6 billion in 2022 at a CAGR of 5% with the cloud segment at $0.97 billion. Adaptive Insights is a leading player in the cloud-based corporate performance management solutions market.

Adaptive Insights’ Beginnings

Adaptive Insights was founded by Robert Hull in 2003 when he was looking for an easy-to-use cloud-based offering for financial management. As a CFO consultant, Rob had realized that most organizations use excel for financial modeling. He also realized that excel had very limited capabilities as a financial modeling tool and therefore the market needed a more flexible financial modeling offering that would be cloud-based and not involve complex deployment issues that come with products like Hyperion.

Within a year, Adaptive Insights, then known as Adaptive Planning, had released the first version of its product. The company initially focused on the SMB segment and developed a product that would help these businesses drive a real-time planning process through dashboards and performance metrics. Over time, the product has evolved to cater to the end-to-end process of planning, consolidation, analytics, and reporting. It is also well-integrated with several ERP, CRM, and HR applications including products of NetSuite, Workday, and Salesforce.

Today, it has expanded its portfolio to enable businesses of all sizes to collaboratively plan and model, easily access real-time analytics, streamline complex financial reporting, and accelerate financial consolidation. It has over 3,500 customers in over 50 countries.

Adaptive Insights’ Expanding Offerings

In today’s world where change is accelerating, Adaptive Insights recognizes that everybody in an agile company plans. So, it has recently launched its Business Planning Cloud, which extends its planning capabilities to all departments and functions in an organization so that they can quickly and easily model any part of a business.

It has also extended its business planning cloud to support an entire suite of solutions for sales planning. Adaptive Insights for Sales is a purpose-built planning and analytics solution driving performance and predictability. It is designed for companies of all sizes to maximize sales efficiency and sales investments. It modernizes sales capacity, quota, and territory planning. Built on Adaptive Insights’ scalable platform, Adaptive Insights for Sales links sales and territory plans to the overall financial plan so that business leaders can align strategy with execution. Market leading early adopters include Acquia, Apptio (NASDAQ:APTI), Ivanti, MongoDB (NASDAQ:MDB), and Winshuttle.

Adaptive Insights’ Financials

Adaptive Insights earns revenues through a subscription-based model. It does not disclose detailed financials, but as per a December 2017 release, the company says it has crossed the $100 million revenue threshold, for the trailing 12 months, and has $100 million in annual recurring subscriptions. Its profitability figures are unknown.

Adaptive Insights has been venture funded so far with $177 million in funding received from investors including Salesforce, RBC Venture Partners, Norwest Venture Partners, ONSET Ventures, Bessemer Venture Partners, Information Venture Partners, JMI Equity, Cardinal Venture Capital, Monitor Ventures, Cardinal Venture Capital, and Relay Ventures. Its last round of funding was held in June 2015 when it raised $75 million in a round led by Bessemer Ventures, Information Venture Partners, Norwest Venture Partners, and ONSET Ventures at $500 million.

The company has reportedly hired investment bank Morgan Stanley to lead an IPO later this year.

Questions for the Board

The 2017 Gartner Magic Quadrant places Adaptive Insights in the Leaders quadrant along with Oracle, Anaplan, and Host Analytics. Microsoft, IBM, OneStream Software, and Vena Solutions are some other competitors.

For nearly a decade, NetSuite had been a close OEM partner for Adaptive Insights. But following the $9.3 billion acquisition of NetSuite by Oracle, things have changed somewhat. Adaptive Insights announced that it has moved away from the OEM relationship with NetSuite to one of a referral partner. How has Adaptive Insights fared since then?

What is Adaptive Insights’ game plan to stave off the competition from new and old players? In my recent post SaaS Companies: You Have an Unprecedented Opportunity, I lay out the hyper active entrepreneurial scene in SaaS around the world. Does Adaptive Insights plan to acquire any of them to expand its product portfolio?

This segment is a part in the series : 2018 IPO Prospects