SaaS start-up Icertis aims at $50 billion valuation, global domination

The global market for Contract Lifecycle Management is estimated at $3 bn

Software as a Service (SaaS) start-up Icertis which has quietly come to dominate the contract contract lifecycle management market among Fortune 5000 companies is aiming even higher - it is looking at a $50 billion valuation in the next five to seven years.  

The company shot into the limelight recently when it raised funding from SoftBank. After that, Icertis raised money from SAP which helped its valuation to hit $5 billion.

Contract Lifecycle Management (CLM) helps companies by automating all the contracts that they enter into and providing intelligence to minimise risks, make more informed business decisions, improve accuracy, and manage contracts better.

It is implemented across the enterprise from the board level to below and therefore the deal size is large. According to estimates, the total global market for CLM is estimated to be $3 billion already.  

Explaining the company’s targets, Monish Darda, co-founder and chief technology officer, said ‘if our model works, we should get to $50 billion in the next 5-7 years, provided everything goes well and we build a consequential company’.

Icertis is headquartered in Bellevue, Washington and has offices in Pune and Singapore. To put its current ambitions in perspective, America’s first SaaS company to list from India on the Nasdaq - Freshworks - opened at a valuation of $13 billion last September (though it is currently valued at $5.8 billion).  

Darda points out that when Icertis entered the market eight years ago, it had three global competitors: IBM, SAP and Oracle. “Earlier, one of them or all used to pitch for global RFPs but we never lost a deal against them. Today, they are not there as competitors. We have 70-80 per cent of the CLM market of the top 1000 Fortune 500 companies,” he said.  

But he added that he thinks all the old competitors will come back into the game owing to the growing size of the market. This, he said, does not worry him.

ICERTIS' CURRENT STATUS AND FUTURE PLANS

• Dominates the CLM enterprise market globally amongst Fortune 1000 companies
• Three of the five top global companies are its customers
• Sees partnerships like the one it has with SAP as the way to go with competitors. It is not an exclusive deal: It can go with other global majors.
• CLM deals are large in terms of revenue generation as they have to be implemented across the enterprise at every level

“Competitors have the option to build on their own but that will take a lot of time for them to beat us. Or they can go for acquisition but we are possibly too expensive so that is why it makes sense to partner with us,” said Darda.

In fact, that is already happening. The company has got into a partnership with SAP which has also invested in it. Darda says that about 70 per cent of its clients use SAP as an ERP partner so there is already a lot of overlap.

Moreover, LCM can be integrated with ERP which will reduce friction and ensure seamless operations in organisations.

Darda stresses that Icertis’ partnership with SAP is not exclusive and it is happy to work with others too. Since Icertis has raised a lot of money which it has to invest, the company does not expect to be profitable for another couple of years though it expects to break even in this time. Its focus is on growth right now.

It is also preparing the ground for all the regulatory requirements

of an IPO and will list it in Nasdaq though it has no timeline for

this yet.

“You go for an IPO because the cost of money is cheaper than PEs, it makes the founder feel good (he has already done this in his earlier start-ups), because the market is good and because it gives an exit to investors and others. While the exit route is a key reason, there are many other ways you can do it apart from an IPO,” said Darda.