Icertis, welcome to the unicorn club.
The Bellevue, Wash. contract management startup today announced a whopping $115 million investment, the second-largest funding round for a Seattle-area startup so far this year, to push its valuation past $1 billion. The 10-year-old company has now raised $211 million to date as it aims to fend off an ever-growing list of competitors.
Icertis builds software to help companies keep track of deals with suppliers and customers that require extensive contracts. Given how the legal system works, that’s a lot of contracts, and Icertis’ software also helps companies negotiate better contracts by highlighting ways to save money or move faster.
“The contract governs every dollar that comes in to the company and every dollar that you spend, and if you don’t have the contracts right … you can get into trouble over a long period,” Icertis CEO Samir Bodas said in an interview with GeekWire.
Contract lifecycle management will be a $20 billion market over the next five years, per a recent report from MGI Research, growing at more than 30 percent per year.
Icertis’ milestone represents another feather in the cap of Seattle’s tech scene and its status as an enterprise software hub. Just three months ago, fast-growing sales automation company Outreach also reached unicorn status after a huge funding round. Other recent notable investments for Seattle enterprise companies include a $103 million round for Auth0; a $60 million round for Highspot; a $50 million round for Amperity; a $50 million round for Zenoti; and a $43 million round for Flexe.
A number of Seattle-area enterprise software companies have also recently gone public, including Smartsheet and Avalara. Anchor tech giant Microsoft is at the heart of the region’s ascension as a software hub, spinning out leaders of roughly a quarter of the startups in the GeekWire 200 ranking. Bodas is a Microsoft vet, having spent seven years there in the 1990s, where he gave presentations directly to Bill Gates and Steve Ballmer.
Icertis’ wide range of competition includes products from tech giants including DocuSign, SAP and Oracle and smaller firms with more of a microscope on contracts such as Conga and ContractWorks. Contract management is one of the few enterprise software categories still up for grabs, Bodas said, without an incumbent giant in control. Bodas claims Icertis is the first $1 billion contract management company, putting it in position to lead the way.
Icertis stands out because its platform is a one-stop shop when it comes to contracts, Bodas said. It manages contracts for items companies both buy and sell, where most companies only cover one side of that equation.
Icertis also employs advanced technologies such as artificial intelligence and machine learning that can read into the contracts and actually understand what they mean for the companies’ balance sheets. It allows one hand of the company to know exactly what the other one is doing.
“It connects itself to all the systems around it,” Bodas said of the company’s contract management platform. “It connects itself to your procurement system, your purchase order system, your delivery system, and it becomes the nerve center of your commerce.”
In total, customers manage 5.7 million contracts on Icertis’ platform, valued at more than $1 trillion. The company has focused primarily on selling to the biggest companies, or those with more than $5 billion in annual revenue. But Icertis strives to be the “contract management platform of the world,” and that means gaining ground with smaller businesses as well.
Icertis has grown to 2 million users across the world, and it counts some of the most prominent companies in the world, including Microsoft, Google, 3M and Airbus, as customers. It has traction in a variety of industries, including retail, airlines and manufacturing.
The company is approaching $100 million in annual revenue, Bodas said. Roughly 40 percent of its revenue comes from the U.S., 40 percent is from Europe and the remaining 20 percent comes from Asia Pacific.
Icertis is not yet profitable as it continues to grow, but Bodas said the company is “cash efficient.” Bodas isn’t thinking about going public right now, as that opens up the company to host of macro-economic factors out of its control that could impact its growth and success.
The Series E funding round was led by Greycroft and Premji Invest with participation from additional investors including B Capital Group, Cross Creek Advisors, Eight Roads, Ignition Partners, Meritech Capital Partners and PSP Growth.
Icertis will use the cash infusion to build out more business applications, beef up its AI technology, grow sales and marketing initiatives to reach more companies in more areas and finance potential future acquisitions. With this round, Icertis will also double down on blockchain, the trendy but controversial technology that could make for an interesting development in contract management.
Bodas cited Icertis’ recent deal with automotive giant Daimler as an example of blockchain’s potential. With a sprawling supply chain, the Mercedes-Benz parent company has to work with a huge group of subcontractors. Through the blockchain, which is meant to create a more publicly viewable ledger of transactions, Daimler can ensure that deals down the chain with subcontractors meet its standards in areas like privacy, sustainability and labor treatment.
Icertis also recently partnered on a blockchain-related deal with Microsoft.
Icertis today has 900 people in 12 offices across the globe, including 150 employees at its Bellevue headquarters just down the street from Microsoft.
Bodas, whose company today sits at No. 11 on the GeekWire 200, still draws on his time at Microsoft, which ended in 2000, nine years before he started Icertis. He aims to apply the same level of detail and scrutiny that Gates, Ballmer and other executives gave his presentations and replicate their ability to think about how each new product or initiative would fit in with the larger organization.
“How they brought it all together was a tremendous learning for me,” Bodas said. “It really trained me well to think about the business holistically, end to end, in all its depth and breadth.”