Sales Software Upstart Preps for IPO With Late-Stage Funding
Apttus, a cloud software company that automates the process of turning sales calls into signed contracts, has closed another $88 million in late-stage funding that CEO Kirk Krappe said will likely be its last infusion before an initial public offering in the first half of 2017.
The round was led by GII (Gulf Islamic Investments) and included new and previous investors K1, Iconiq, and KIA. Krappe declined to disclose the valuation, but said this Series D funding is an “up round” compared with Apttus’ Series C investment slightly more than one year ago.
At that time, the company was valued at more than $1 billion. Including this new money, the San Mateo, Calif., firm has $274 million in backing.
“We decided to secure this last funding round to get us through to cash profitability,” Krappe told Fortune.
Apttus specializes in “quote-to-cash” software applications. That’s a fancy way of saying it automates tasks such as building sales proposals, calculating pricing that is customized for specific deals, generating invoices, and managing customer contracts. The firm has more than 600 customers—100 of them within the Fortune 500—including foodservice company Aramark and cloud software pioneer Salesforce.
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To be clear, Apttus hasn’t filed its IPO papers yet, and it hasn’t disclosed its revenue. When Fortune spoke with Krappe last year, he was hoping for a 2016 debut, but those plans never materialized amid the uncertain IPO market during the first half. However, the company hired a new CFO in late June specifically to prepare for the public market. That executive, Sydney Carey, previously held financial management positions at business software companies Tibco Software, ZScaler, and MongoDB.
Apttus’ competition includes Steelbrick, a startup typically focused on smaller business that was bought by Salesforce in December; and Icertis, a Bellevue, Wash., firm that has sold its software to software giant Microsoft, pharma company Roche, and medical supplier Becton, Dickinson & Co.
When it was acquired, Steelbrick had about 350 customers. Icertis doesn’t disclose its total customer count, but most of its customers have more than $1 billion in annual revenue, according to Icertis co-founder and CEO Samir Bodas.
Like many of the software companies that sprang up around Salesforce’s products, Apttus is investing seriously in machine learning technology. For example, it has developed a feature that analyzes the steps that top sales performers take while negotiating a deal and then makes suggestions that could help other members of the sales team close more business.
Machine learning software also underpins a new voice assistant called “Max,” which is basically a dictation tool. By “conversing” with Max, a salesperson can log notes or comments about a customer visit immediately after a scheduled sales meeting, Krappe said. That information will automatically be appended to the records associated with that customer or customer prospect, and could eventually be used to generate an invoice or contract, he said.