Despite the global economic slowdown, the software-as-as-service (Saas) boom shows no sign of running out of steam. Data from market research specialist Gartner suggests global spending on SaaS solutions will reach $195 billion his year, up from $146 billion in 2021. A BetterCloud survey found the typical company is now using an average of 130 apps bought and paid for on a SaaS basis.
No wonder that business is booming for ventures such as Spendflo, which helps organisations to get a handle on the way they buy and manage their subscriptions. Spendflo, first featured in Forbes less than a year ago, is today announcing an $11 million Series A round, taking the total sum raised from investors over the past 12 month to $15.4 million.
Spendflo’s pitch is that it offers a simple way for companies to maintain control of their SaaS contracts. It provides a single view of all their apps, ensuring companies can see what use they’re getting out of each subscription, as well as how much they’re paying for it. It also offers access to savings on both new and SaaS subscriptions.
In a marketplace where the number of apps that many companies use is increasing by 20% a year, that’s increasingly valuable. Some businesses are now spending tens – or even hundreds – of millions of dollars each year on SaaS solutions, so the ability to manage and control that spend is crucial. All the more so given the economic headwinds now facing companies.
“Good finance leaders are always looking for solutions that help them to save money and to operate efficiently,” says Siddharth Sridharan, co-founder and CEO of Spendflo. “But they have become more strategic than ever about SaaS spending over the past 12 months.”
That trend has seen Spendflo’s revenues increase 15-fold since the beginning of 2022, with customer numbers up by a multiple of five. The company has quadrupled its own workforce over the same period.
The company’s latest fund raise will ensure this growth can be sustained, explains Sridharan. “We want to be the solution that scales with businesses as they increase their use of SaaS and as their spending expands.”
The new capital is earmarked for two priorities. First, Spendflo is hoping to double down on its activities in the US market; while the business is now making sales worldwide, North America appears to be a particular sweet spot, and the company is keen to expand its local presence in the market.
Objective number two is further product development. Spendflo is in the process of expanding its service around three hubs that clients will use to buy, manage and secure their apps. The platform’s buying hub streamlines the SaaS procurement process; the management hub provides visibility into SaaS usage and spending, including a feature that allows users to rate each app; the security hub makes it easier for businesses to ensure apps comply with their cyber security systems, both when they are first adopted and on an ongoing basis.
Nevertheless, the overriding objective for Spendflo is to enable users to save money on their SaaS portfolios; the company says it has achieved savings of up to 26% a year on SaaS spending for existing clients.
Rajiv Ramanan, co-founder and CRO of the business, warns that it is too easy for companies to lose sight of their SaaS spending, because individual contracts tend to be small, and therefore fly beneath the radar. It is only when organisations start to look at their aggregate SaaS spending that they realise the scale of their exposure, he argues.
“We need to make a shift,” says Ramanan. “We need to start seeing software as a direct spend – one that is properly and closely managed – rather than seen as indirect spending.”
Spendflo’s backers believe it can be the service that enables that shift. Today’s Series A round is led by by Prosus Ventures and Accel. Other investors in the company include Together Fund, Signal Peak Ventures, and Boldcap Ventures
“Outsourced SaaS procurement and management is emerging as a dominant area of interest for organisations, driven by a complex SaaS stack and the need to rationalise the cost base,” says Ashutosh Sharma, head of investments, India, at Prosus. “We are confident in Spendflo’s ability to become a single source of the truth for SaaS customers.”
“Spendflo has evolved from a SaaS buying solution into an all-in-one platform,” adds Dinesh Katiyar, an Accel partner. “It helps businesses at every stage of their SaaS buying and management journeys, while saving them countless hours and millions in both time and money respectively.”