It’s Halloween. And if you are a contract management software company Icertis, it’s payday. After raising $115 million in 2019, Icertis today secured $150 million — $75 million in convertible debt and a $75 million revolving credit facility — in a combined tranche that brings the company’s total raised capital to $520 million. .
By going the debt route, Icertis avoids having to answer the tricky question of valuation in a particularly challenging economic environment. (Icertis was valued at $2.8 billion in March 2021 and Reportedly increased to $5 billion earlier this year, but valuations in technology are falling sharply.) Convertible debt allows Icertis to pay its loan obligations with equity or equity, while the credit facility allows it to borrow and repay on a continuous basis .
CEO Samir Bodas was rather vague about the plans for the new money, but told londonbusinessblog.com in an interview that it would be about “accelerating the adoption of transformational technologies such as artificial intelligence, natural language processing, machine learning and blockchain to create material, unique and consistent value for customers.” That’s all rather ambitious (and, frankly, a bit of a buzzword), but Bodas claimed Icertis is well positioned to fend off rival startups in the cutthroat contract management space.
“Industry analysts such as Gartner and Forrester call our category contract lifecycle management (CLM), but Icertis sets itself apart from traditional CLM providers,” said Bodas. “Not only do we deliver efficiency in contract creation and negotiation, but we use AI and natural language processing to structure contract information into on-demand data and connect that data to operational systems… to automate processes, maximize contract value and to ensure compliance.”
Icertis was founded in 2009 by Bodas (a veteran of Microsoft and Aztecsoft) and Monish Darda (formerly an executive at BladLogic). management reports and automatic commitment tracking. The platform systematizes contracts and associated documentation, extracting data such as contact details and clauses to identify and verify contractual obligations to ensure compliance.
Recorded contracts can be used to model commercial relationships in Icertis, allowing users to identify contracts that are missing clauses necessary to comply with regulations such as GDPR. Bodas claims that the AI systems that power this and other features of the Icertis platform are among the most capable of their kind, capable of handling over 7,000 different contract types across 11 verticals.
“We are forging and leading a new category of technology – contract intelligence – that uses AI to automate processes and deliver insights with structured, connected contract data to digitally rethink the purpose of any commercial relationship and ensure that the intent of those agreements is fully realized. realized,” Bodas said.
That’s a bold statement. But it’s true that Bellevue, Washington-based Icertis is already one of the larger and more successful contract management software providers to emerge in recent years. Bodas says the company left 2021 with annual recurring revenue north of $100 million and more than $200 million in recurring revenue recently. He declined to disclose the size of Icertis’ customer base, but noted that current customers include Microsoft, Boeing, Google, Johnson & Johnson, Sanofi, Mercedes-Benz and Qantas and unnamed government entities.
This year, Icertis announced a partnership with SAP to make Icertis the CLM solution of choice for SAP customers. (In addition to Softbank, SAP has a minority stake in Icertis.) Bodas says it will create a contract management “ecosystem” for SAP customers through integrations with SAP solutions such as Ariba, Fieldglass, S/4HANA and SuccessFactors.
“In this economic downturn, we believe contracts, controlling every dollar in and out of the business, will become the go-to asset as they are an untapped resource of invaluable business value to reduce costs, manage risk, improve compliance to ensure and boost revenue,” said Bodas. “We are optimistic that contract intelligence will emerge from this downturn as the fifth system of record in the enterprise, and that Icertis is in a position to lead it for the long term.”
See investors promise in contract management legal technology for procurement, sales, finance, legal and HR like Icertis’ — perhaps because of the huge addressable market. The contract management lifecycle market is expected to grow from $1.5 billion in 2019 to $2.9 billion in 2024, according to to Markets and Markets.
The early adoption statistics were certainly promising, with one: recently Research by Bloomberg Law shows that more than half of in-house attorneys used contract management programs in 2020. Bodas says Icertis’ platform alone has handled more than 10 million contracts worth more than $1 trillion in more than 40 languages and more than 90 countries
“Contracts are an invaluable source of original data — documenting and arranging the rights and obligations between a company and its suppliers, customers and employees. In other words, contracts provide a single source of truth for commercial relationships,” said Bodas. He gave an example: “Lately, customers have been turning to Icertis to help them navigate inflation in the best possible way. Do their contracts have clauses that allow them to adjust prices in the event of inflation, how often can they raise prices and by how much? We deliver these insights instantly so that every right within a company’s contracts can be realized for maximum value.”
Among Icertis’ competitors are ContractPodAI and SirionLabs, which raised $55 million in July and $85 million in May respectively for their automation-based contract management software. Another formidable rival is LinkSquares, which raised $100 million in April to grow its platform that combines legal analytics with contract lifecycle capabilities.
For what it’s worth, Icertis dwarfs them in size, with more than 2,000 employees spread across its offices in New Jersey, Chicago and elsewhere.