Contract Management Content

Icertis becomes first true CLM unicorn, with $115M funding round — and it sits atop a market that’s red hot and ripe for M&A [PRO]

Global Risk Management Solutions (GRMS)

Icertis announced today that its latest funding round raised $115 million and that the provider of contract lifecycle management (CLM) is now valued at more than a billion dollars, reaching proverbial “unicorn” status.

The funding round was led by two groups, Greycroft and PremjiInvest, with participation from B Capital Group, Cross Creek Advisors, Eight Roads, Ignition Partners, Meritech Capital Partners and PSP Growth, according to a press release. The latest round brings total funding to date to $211 million, the release said.

Mark Terbeek, a partner at Greycroft, said in the release: “We’ve seen (Icertis) become the undisputed CLM leader, acquiring a huge stable of blue-chip customers and generating a return on capital that is among the best we’ve ever seen. We have no doubt they will become the next giant in the enterprise SaaS market.”

The release also noted that “the AI-infused Icertis Contract Management (ICM) platform is used by companies like 3M, Airbus, Cognizant, Daimler, Microsoft and Sanofi to manage 5.7 million contracts in 40+ languages across 90+ countries.”

Icertis is private and doesn’t disclose revenues, but it has been growing extremely quickly (claiming 125% CAGR over the last four years), and with over 800 employees, a forward-looking revenue run rate approaching $200 million seems reasonable, and only requires a 5X multiple to get to a $1 billion valuation (we believe the revenue multiple to be higher than this).

Also, Icertis is a clear market leader in the CLM space based on our latest Q2 2019 SolutionMap deep-dive competitive assessment (available here for free). And, Icertis competitor Exari was recently acquired at roughly a 10X multiple, so there should be little doubt about Icertis’ favorable prospects.

Icertis announced that its new $115 million in funding will be used for continued product development in adjacent product areas (and geographies), verticalization, possible acquisitions, blockchain development and, of course, AI — which is red hot in CLM.

Spend Matters has covered Icertis for years, and while the firm’s stated mission to “become the contract management platform of the world” may seem a bit audacious, the firm has executed historically well due in part to its strong management team and focused strategy as a true CLM pure play that doesn’t focus on any one particular business process area (e.g, within the sell-side for customer contracts).

The firm is also buoyed by the fact that the CLM market is throwing off its shackles as a place for glorified document management systems set up by legal departments to transfer commercial risk to counterparties. Rather, contracts are becoming the ultimate system-of-record for B2B commerce, not just from a legal department standpoint, but a financial one (e.g., where contracts become the new ledgers that augment the G/L), a regulatory/risk standpoint, and an operational one relevant to any place where internal/external stakeholders make commitments to each other.

We call this concept “commercial value management” (CVM), and we discussed its framework in a recent Spend Matters PRO research paper titled “Commercial Value Management: Making Contracts the Commercial Core of Enterprise Value (Part 1).” In it, we stated:

“There is a subtle shift happening within the scope of contract and commercial management (CCM), and a not-so-subtle shift that is also happening within the digital realm (e.g., namely artificial intelligence, low-code platforms, open source, “XaaS”). What’s happening is that as contracts get digitized and more deeply modeled, they are becoming the single most important piece of master data within the enterprise that touches virtually every single stakeholder within these core processes and also within corporate functions such as R&D, risk management, strategic planning, treasury, audit, sustainability, digital/innovation and others.”

In the rest of this Spend Matters PRO / Nexus brief, we’ll examine the following topics:

* Icertis’ prospects relative to multiple CLM market segments and competitors
* How CLM’s evolution to “CVM” impacts Icertis. (Think of CVM as “extended CLM” on steroids.)
* M&A, exit and other considerations for Icertis — including potential acquirers as an alternative to an IPO.

And in a subsequent deeper dive in the August/September inaugural Spend Matters Nexus members’ newsletter for private equity firms/investors, corporate development teams and solution provider CEOs, we’ll feature Icertis and analyze:

* Icertis’ strategy: lessons learned and key takeaways
* Valuation drivers (for Icertis and similar firms) and possible Icertis M&A acquisition prospects/targets
* The prospects for procurement suite providers with legacy CLM capabilities and Apttus, Conga and others in a CVM world

OK, let’s get to it …

Prodigo Solutions Vendor Introduction: Analysis, SWOT, Checklist (Part 2 — Product Strengths and Weaknesses) [PRO]

locum tenens

In our last Spend Matters PRO brief, we introduced you to Prodigo, an 11-year-old provider based near Pittsburgh that is deploying a platform that’s specific to healthcare procurement and contract management. With 20% of the U.S.’s largest integrated delivery networks (IDNs) and more than 30% of Gartner’s top hospital supply chain departments as customers, Prodigo has numerous use cases and a large pile of healthcare-related data on which it has built a strong core product. And although it is not always best-in-class when compared against leading P2P providers that lack a vertical focus, Prodigo’s willingness to target the needs of a specific market have led to some commendable product strengths as well.

Part 1 of this brief provided background on the company and an overview of Prodigo’s offering. In Part 2, we provide a breakdown of what is comparatively good (and not so good) about the solution, a high-level SWOT analysis, a short selection requirements checklist that outlines the typical company for which Prodigo might be a good fit, and some final conclusions and takeaways.

Q2 2019 SolutionMap: Contingent Workforce & Services Technology, SPT and S2P suite software providers’ scoring summary reports now available

As part of the Q2 2019 SolutionMap release, the Strategic Procurement Technologies (SPT), Source-to-Pay (S2P) suites, and Contingent Workforce & Services (CW/S) Technology Provider Scoring Summary reports are available today on SolutionMap Insider.

Prodigo Solutions: Vendor Introduction (Part 1 — Background and Solution Overview) [PRO]

healthcare

Rogue spend is a common problem for procurement in all industries, but in healthcare the issue is on a whole other level. Whereas the typical organization can see about 30% of indirect spend that falls into the off-contract category, that number can climb to as much as 60%.

There are multiple factors that drive these rogue purchases. Notably, in healthcare the distinction between direct and indirect spend is less of an issue than the difference between clinical spend (that is directly related to patient care) and non-clinical spend. These categories are managed a little differently from how procurement organizations typically approach direct and indirect purchases. Internal demand for clinical items can vary significantly, and since not having an item in inventory could be a matter of life and death, the need to spot buy specific medical devices or materials isn’t analogous to an ad hoc spot buy that you might find for many indirect spend categories.

Healthcare spend is also nuanced because the requestors — the medical personnel — often have a stronger say in what is purchased and to what degree cost is a factor than procurement gets compared with other verticals. This includes “physician preference items” where a physician MUST have a certain medical device/instrument that is different than the hospital system standard (and hopefully not because the MD is getting wined and dined by the manufacturer or distributor!).

This industry dynamic applies to the healthcare supply markets, as well, where unique features and quirks, including a much higher use of group purchasing organizations (GPOs) and strong influences by medical device manufacturers over how their products are priced and used within hospitals, only further complicate procurement efforts to bring spending under control. Over 90% of GPO revenue is from supplier-funded “administrative fees” (i.e., rebates that are exempted from federal government kickback regulations), and until this commercial model goes away, hospitals still need to automate them (including percentages of those fees shared back with the hospital) and other supply chain requirements such as distributor owned/managed inventory within the system.

These healthcare-specific challenges are well-known to Prodigo Solutions, a purchasing technology solutions company based in the suburbs of Pittsburgh, Pennsylvania. Originally grown out of the UPMC’s needs for better managing its own internal purchases, Prodigo today operates as a standalone software provider, offering tools that support e-procurement with healthcare-specific controls and post-signature contract management and compliance. Its customers include both integrated delivery networks (IDNs) and small community hospitals alike, and its healthcare marketplace currently facilitates transaction volumes in excess of $15 billion.

This two-part Spend Matters PRO Vendor Introduction series offers a candid take on Prodigo and its capabilities. It will include an overview of Prodigo’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis, and a selection requirements checklist for companies that might consider the provider.

Q2 2019 SolutionMap: Sourcing, Analytics, SRM and CLM software providers’ scoring summary reports now available

As part of the Q2 2019 SolutionMap release, the Sourcing, Spend & Procurement Analytics, Supplier Relationship Management (SRM) & Risk and Contract Lifecycle Management (CLM) Provider Scoring Summary reports are available today on SolutionMap Insider.

Q2 2019 Contract Lifecycle Management (CLM): Provider Scoring Summary

The Spend Matters SolutionMap Contract Lifecycle Management (CLM): Provider Scoring Summary is only available to SolutionMap Members. This SolutionMap analyzes a select group of Contract Lifecycle Management (CLM) providers. It is part of our Q2 2019 SolutionMap report series, also featuring spend analytics, sourcing, supplier management (including supplier information management, performance management and risk management), e-procurement and invoice-to-pay providers.

SolutionMap: 54 Procurement Software Companies Ranked (Q2 2019 Update)

Spend Matters today released its Q2 2019 SolutionMap, ranking 54 procurement software companies across 12 solution categories, including E-Procurement, Sourcing, Spend Analytics, Supplier Relationship Management, Contract Lifecycle Management and Contingent Workforce & Services. Click on this article to learn about SolutionMap's biggest revamp yet, and to see how to access rankings for free!

Q2 2019 SolutionMap Release Notes: Sourcing, Spend & Procurement Analytics, Supplier Relationship Management & Risk, Contract Lifecycle Management and Strategic Procurement Technology Suites

This Spend Matters SolutionMap Insider research note provides insight into the Q2 2019 SolutionMap release for Sourcing, Spend & Procurement Analytics, Supplier Relationship Management & Risk, Contract Lifecycle Management, and Strategic Procurement Technologies Suite SolutionMap areas, reviewing the process we follow and highlighting what has changed since the last release.

Within the individual areas covered in this brief, the following providers have been added to the Q2 2019 release:

  • LevaData is a new participant in the Sourcing and Spend & Procurement Analytics SolutionMap categories.
  • Procurence is a new participant in the Supplier Relationship Management & Risk SolutionMap category.

Additionally, the following providers have updated their RFIs and received updated scoring following the submission and demonstration of new and updated capabilities based on production releases of their platform. (Non-GA capabilities are not considered in SolutionMap scoring.)

In Source-to-Pay:
  • Coupa, Determine, GEP, Ivalua, and SynerTrade
In standalone Sourcing:
  • Allocation, Bonfire, EC Sourcing, Market Dojo, Scanmarket, and Wax Digital
In standalone Spend & Procurement Analytics:
  • AnyData Solutions, Sievo, Simfoni, Spendency, and SpendHQ
In standalone Supplier Relationship Management and Risk:
  • Allocation, APEX Analytix, ConnXus, HICX, and State of Flux
In standalone Contract Lifecycle Management:
  • Agiloft, Coupa-Exari, Icertis, and SirionLabs

In addition, 95 new or refreshed customer references (and 175 individual map references) were added in the Strategic Procurement Technology areas for Q2 2019.

The following providers did not update their scoring and, as a result, had their scores adjusted based on a common shift factor (that preserves positional integrity relative to peers) and any platform updates, or lack thereof, that the analysts have received since the last time the RFIs were filled out. Nearly all the providers requested a short-term delay because of the intensive nature of the expanded RFI (with nearly 800 requirements for Source-to-Pay), but we expect most of them to participate in upcoming 2019 Q3 or Q4 releases.

In Source-to-Pay:
  • SAP Ariba, Jaggaer (Indirect, Advantage, and Direct), and Zycus
In standalone Sourcing:
  • Keelvar and Scout RFP
In standalone Spend & Procurement Analytics:
  • Opera BIQ
In standalone Supplier Relationship Management and Risk:
  • Aravo and Sourcemap

This SolutionMap Insider research note provides insight into the nature of the expanded RFI, methodology and additional changes in the Q2 2019 SolutionMap release.

Q2 2019 SolutionMap Source-to-Pay Release Notes

This Spend Matters SolutionMap Insider release note provides insight into the Q2 2019 SolutionMap release for Source-to-Pay, reviewing the process that we followed for this quarter’s release.

The providers in the Q2 2019 Source-to-Pay SolutionMap include Coupa, Determine, GEP, Ivalua and SynerTrade. All of these providers were required to participate in SolutionMap for each underlying module, as well. These individual areas include Sourcing, Spend and Procurement Analytics, Supplier Relationship Management & Risk, Contract Lifecycle Management, E-Procurement and Invoice-to-Pay. All of these providers are also included in the individual Strategic Procurement Technologies (SPT) and Procure-to-Pay (P2P) suite views.

The five providers above have updated their RFIs and received updated scoring following the submission and demonstration of new and updated capabilities based on production releases of their platform. (Non-GA capabilities are not considered in SolutionMap scoring.)

SAP Ariba and Zycus did not update their scoring and, as a result, had their scores adjusted based on a common shift factor (that preserves positional integrity relative to peers) and any platform updates, or lack thereof, that the analysts have received since the last time the RFIs were filled out. These providers requested a short-term delay because of the intensive nature of the expanded RFI (with nearly 800 requirements for Source-to-Pay), but we expect them to participate in upcoming 2019 releases.

The Source-to-Pay customer data set is composed of a subset of the 792 individual organization references included in the overall SolutionMap scoring as of Q2 2019*.

This SolutionMap Insider research note provides insight into the nature of the expanded RFI, methodology, customer references and additional changes in the Q2 2019 SolutionMap release.

*Customers using more than one module that a vendor provides can opt to fill out a single survey within each individual suite area (e.g., a customer using two modules for P2P and four modules for SPT would need to fill out only two surveys).

Q2 2019 SolutionMap Release Notes: Contingent Workforce & Services (CW/S) Enterprise Technology Solutions — Temp Staffing, Contract Services/Statement of Work (SOW), Independent Contract Workers (ICW)

Q2 2019 marks the fourth research cycle for Spend Matters’ Contingent Workforce & Services (CW/S) “enterprise technology” SolutionMap, the sourcing and management of three underlying spend categories:Temp Staffing, Contract Services/Statement of Work and Independent Contract Workers (ICW).

The providers in the Q2 2019 CW/S SolutionMap include Beeline, Coupa (formerly Coupa-DCR Workforce), Field Nation, Shortlist, SirionLabs, TalentNet, Talmix, TalonFMS, Upwork Enterprise, Vndly and WorkMarket (ADP).

Given Spend Matters’ procurement orientation, we evaluate “enterprise technology” vendors within a source-to-pay (S2P) reference model. In other words, we look at vendors in terms of their capabilities that address some or all enterprise requirements that arise within an S2P lifecycle (i.e., from supplier sourcing to worker or supplier payment).

In this CW/S research cycle, there were no new providers, and again limited participation in the Temp Staffing and Contract Services/SOW SolutionMap categories. However, a good number of key vendors have expressed interest in participating in upcoming cycles.

There continues to be vibrant interest in participation by vendors in the emergent Independent Contract Workers (ICW) SolutionMap category.

We have gathered extensive business profile information, received 75 customer survey references and have assigned scores to specific solution capabilities (RFI line items) ranging from well over 100 to about 300, depending upon how many SolutionMap categories a particular vendor participated in.

This SolutionMap Insider research note provides insight into our methodology and additional changes in the Q2 2019 SolutionMap release.

SirionLabs’ customer reviews are in the new SolutionMap Customer Insights report

This week’s SolutionMap Customer Insights report focuses on customer reviews for SirionLabs, a specialist in contracts. Its applicable SolutionMap categories for this report are in Contract Lifecycle Management (CLM) and Contract Services/SOW.

SolutionMap Insider members can click here to read about SirionLabs in our latest report. In each Customer Insights report, we provide a one-page summary of feedback that includes ratings on how well the vendor meets user expectations, three key differentiators for the vendor and a list of quotes about the vendor’s greatest strengths.