Apttus, a company that helps customers manage the second half of the sales cycle involving quotes, contracts, and collecting the money, announced $41M in Series B funding today.
The investment was led by Salesforce Ventures, the investment arm of Salesforce.com. It’s worth noting that it’s the largest investment ever in a company that Salesforce wasn’t buying outright, according to Apttus CEO Kirk Krappe.
Additional investors include K1 Capital and Iconiq. Today’s money brings the total raised to $78M.
Apttus is built on top of the Salesforce platform, and according to Krappe it’s a perfect complement to Salesforce CRM. Sales people begin making sales calls and entering information about a given prospect in Salesforce.
Over time, as they sell products and services to these prospects, they convert to customers. At that point, the sales person enters a new phase in the sales cycle and Apttus is designed to support this part of the process.
The first step is generating a quote, which seems like it would be a simple matter, but as Krappe points out, some customers have elaborate product catalogues, making quoting a much more complex undertaking.
He uses GE Aviation as a particularly intricate example. It has an astounding 200,000 options, so you can imagine that putting together a quote gets tricky at that level of detail. He says, it gets even thornier with constraints and dependencies within the catalogue itself and around geography, government rules and so forth.
After the quote goes out and the customer agrees to the deal, next comes generating the contracts and that’s another level of complexity when the lawyers get involved. Once you’ve got the negotiation complete, the customer has to pay — and there may be payments by milestones or by certain dates or however it’s outlined in the contract.
Krappe says the product has been wildly successful, but it’s a complex sale requiring a team of people to put together and implement. As the company grew, doubling to 400 people in the last year, the executive team began to see quality issues as new hires were being thrust into the field without proper training.
At that point, in the midst of this rapid expansion, he pulled back and came to a couple of conclusions.
First of all, he couldn’t simply hire based on a current requirement. He needed to anticipate his needs before they happened. He concluded if he needed 40, he was hiring a 100. But he wasn’t going to toss these new hires into the fire without proper training just for the sake of getting ahead of the curve.
He also decided to start an academy, an intensive 8 week course in which every employee would learn the company mission and how they fit. He says people thought he was crazy to go to this level of detail and expense, but he reports the project has been tremendously successful.
The approach had several benefits. First, every employee is now on the same page and understands exactly what their job requires. Perhaps more importantly, as a result of going through this employee boot camp, employees saw that the company cared about their success. This has built a high level of loyalty and an esprit de corps among the group. He says in a time where finding and keeping employees is highly competitive, this is a significant advantage.
As for the future, with $41M in his coffers, Krappe knows the company is only going to get bigger. He says it’s logical to think that an IPO or a sale (perhaps to Salesforce) is in its future, but he says, he honestly doesn’t look that far ahead. He says, even though it sounds cliché, he just wants to build a great company.
He’s found a way to deal with rapid growth and proven that he can scale the company. The money should help him take it to the next level, whatever that happens to be.