For businesses struggling to get on top of multiple Software-as-a-Service (Saas) subscriptions, signing up for yet another SaaS solution may not seem like the most obvious response. But Siddharth Sridharan, co-founder of spendflo, which is announcing a $4.4 million seed round today, holds promise. “We should be the last SaaS contract you ever have to settle for yourself,” he says — otherwise you’ll get your money back.
Spendflo aims to provide a one-stop shop for businesses that are benefiting from the SaaS revolution but losing control of their contracts. It gives customers transparency about how much they spend on SaaS subscriptions, insight into how much they use them, and access to savings on both existing and new subscriptions.
The global SaaS market has boomed in recent years and is now worth nearly $330 billion a year, Spendflo points out. SaaS products are revolutionizing the way companies purchase IT. Instead of having to install complex technology on-premise, companies are signing up for solutions that are quickly and easily accessible via the cloud. IT doesn’t have to do technology procurement for the rest of the business; instead, each function can buy the SaaS tools it needs for certain tasks.
So far, so much the better. But there is a downside to this approach. The average company now has more than 100 SaaS subscriptions that cost more than $1 million per month, Spendflo points out. No person or position in the company – not finance and not IT – has insight into all those subscriptions in one place. Spending can spiral out of control without the company having any idea whether each SaaS solution is actually being used.
That’s where Spendflo comes in, explains Sridharan, who conceived the concept while running the business at California electric vehicle specialist Volta Charging. “Every quarter, my CFO complained that we were spending too much money on SaaS solutions, but I didn’t know who owned the contracts and how they were using them,” he recalls. “I was so fed up and also realized that I couldn’t be the only one with this problem.”
Last year, Sridharan teamed up with co-founders Ajay Vardhan and Rajiv Ramanan to commercialize a solution. The Spendflo platform allows a company to track all its SaaS tools and subscriptions in one location. The platform provides crucial data on how much the company spends on each subscription, as well as when contracts need to be renewed; Importantly, it also provides usage data so the company can see if it’s getting value for money.
In addition, because Spendflo can see what multiple companies are paying for the same SaaS solutions, it is able to help customers realize significant savings; it negotiates discounts on behalf of its customers – both upfront and for existing subscriptions – based on market-wide data.
Spendflo is so convinced of its platform’s capabilities in this area that it offers customers a money-back guarantee. “If we can’t save you more by lower subscription fees than we charge you, we’ll refund the difference,” promises Rajiv Ramanan. “Your annual subscription to Spendflo will be less than the savings it brings to your business.”
Spendflo founders celebrate success of $4.4 million seed funding
It’s an attractive field, but are SaaS vendors willing to play with it, as it could mean lower margins for them? In fact, according to Ramanan, most sellers are enthusiastic about Spendflo. “They are much happier dealing with data-driven customers who understand what they should be paying,” he says. In any case, Spendflo manages the supplier-subscriber relationship, making new subscriptions operational more quickly and facilitating renewals; in that sense, it also provides value for SaaS vendors, who are often frustrated with the way approvals get stuck in customers’ email trails and administration systems.
The company is certainly off to a flying start, growing 25-30% in the six months since launch. The company already manages tens of millions of dollars in SaaS subscriptions for customers — and says it’s achieved an average of 23% savings on each subscription on their behalf.
Such success has not gone unnoticed by investors. Spendflo began with support from Atoms, a program set up by global venture capital firm Accel to support start-up companies with pre-seed financing. Today, it announced the successful completion of a $4.4 million seed round led by Accel India and the venture capital investor Together Fund. Other participants include BoldCap and Signal Peak Ventures, as well as a number of founders and operators at companies in the SaaS sector.
Spendflo expects to commit the majority of its capital to its go-to-market business in North America, where it is growing rapidly. It also sees potential for further product development, particularly around the buyer experience for buyers of SaaS solutions, who must juggle finance, security and procurement issues before moving forward with new subscriptions. “There has been no way to buy, track and optimize SaaS solutions, but that’s why we exist,” adds Sridharan.