2016 IPO Prospects: Apttus Bootstrapped First, Raised Money Later

The Quote-to-Cash industry appears to be a high interest industry right now. According to Gartner, the market opportunity is expected to grow to $41 billion in 2018 from $31 billion in 2015. In December last year, Salesforce spent $360 million on the acquisition of SteelBrick, a startup in this space. San Mateo-based Apttus is a much bigger player in the market and is preparing to go public now.

Apttus’s Financials

Apttus was founded in 2006 by Kirk Krappe, Neehar Giri, and Nathan Krishnan as a cloud-based contract lifecycle management software company. Over time, Apttus evolved into a Quote-to-Cash solution that helps organizations manage and customize sales contracts. Its applications work on Salesforce’s Cloud and allow users to extend the functionality of the Salesforce CRM platform. Its application portfolio includes Quote-to-Cash Intelligence (Analytics), E-commerce, Configure Price Quote, Renewals, Contract Management, X-Author, and Revenue Management. It offers its products to more than 500 customers with over 450,000 users globally.

Apttus does not disclose its financials. As of 2013, Apttus had more than $50 million in revenues. Last year, Apttus claimed to had been delivering growth of more than 100% annually and was operating at an annual run rate of $120 million for the year. It recently hired its 1,000th employee.

For its first seven years, Apttus was bootstrapped and produced multi-million dollars in revenues. Since then, it has raised $186 million in funding from investors including Kuwait Investment Authority, Salesforce Ventures, Iconiq Capital and K1 Capital. Its last round of funding was held in September last year when it raised $108 million in a round led by Kuwait Investment Authority at a valuation of over $1 billion. More recent estimates peg its valuation at between $1 billion-$1.5 billion. Apttus is now rumored to be preparing for an IPO this year.

Apttus and Salesforce

Through its partnership with Salesforce, Salesforce users can use Apttus apps to generate price quotes, negotiate contracts, and manage fiscal elements of the customer relationship. Salesforce is essential to Apttus’s growth as well as it helps Apttus gain access to bigger organizations. According to a Forrester report, Apttus has a clear advantage on account of the common UI with Salesforce and its ability to inherit native SF object types and associated capabilities such as accounts and contacts. Organizations using Salesforce prefer to work with Apttus as it will make it possible for them to manage the entire quote-to-cash process under a single umbrella.

Till recently, Apttus was confident of its relationship with Salesforce. But the SteelBrick acquisition will have it worried as Salesforce now has its own version of the offering. Analysts believe that Salesforce may also still be testing waters with the acquisition as Apttus would clearly be a much bigger purchase. Apttus claims not to be worried too much because of its size and its focus on the mid-sized and larger enterprises. SteelBrick, on the other hand, focused on smaller organizations. Apttus also realizes that it could potentially be next on the shopping list for Salesforce and is willing to consider the deal, provided “the numbers work”.

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