Icertis will be contract intelligence platform of the world: Samir Bodas

The CEO of the SaaS player talks about the significance of SAP's investment, and the SaaS ecosystem in India

Bellevue (US)-headquartered and Pune-based Icertis, a SaaS player that dominates the contract management software segment, received an undisclosed investment from SaaS giant SAP. This follows an investment made by Softbank in October last year, which valued the company at $5 billion. SAMIR BODAS, co-founder and chief executive officer of Icertis talks about the significance of SAP’s investment, and the SaaS ecosystem in India, in an interview with Shivani Shinde. Edited excerpts:

What does SAP’s investment in Icertis mean?

It’s a very broad strategic deal, which is very exciting for us. The first aspect of the relationship is that we will become the preferred Contract Lifecycle Management (CLM) or contract management product for all of SAP’s products. SAP has products across service lines like procurement, sales, finance and HR, and all these products need contract management support. What this means is that the Icertis platform will be deeply integrated into SAP products.

From a customer perspective, for the first time a company like SAP, of that size, at that scale, has deeply integrated contract management solution offerings into their suite of products. For us this is big also because SAP’s sales and marketing team of more than 30,000 will also sell CLM to their customers. This is a fantastic sales leverage for a company like us. And the investment shows long-term commitment to the partnership.

How did the deal happen? What is the back story?

Over the last several years we have gained leadership positions in this category. We are the de facto leaders of CLM among enterprises that have revenue in the $2 billion category. Our vision is to drive the adoption of one contract management system across the enterprise, as historically, every department has had its own system. SAP, too, had a product in CLM, but their core focus has been on ERP, procurement, and so on.

Over the years contract management’s importance has grown in significance among enterprises. This has more to do with how technology such as natural language processing, AI, ML, and blockchain have transformed this product category.

Contract is a very static asset. With these technologies we have built a product that can be read and understood by a machine, which has never happened so far. And once the machine knows what is written in the contract, it can track whether the contract intent is being fully realised. About 15 per cent of Fortune 500 companies are our customers, and growing rapidly. SAP and Icertis started to work together in 2020, and when they saw what was being delivered and, more importantly, the customer reaction to it, they saw the massive opportunity that we could create. What sealed the deal was that both I and Monish (co-founder and chief technology officer) realised that SAP and Icertis share the same value systems.

SAP didn’t make an offer to acquire Icertis?

Our aspiration is to build the contract intelligence platform of the world. We believe this category has such long legs that you can build a Salesforce of contract management, and the best way to do that is to work through partnerships. Thankfully, SAP respected that.

Will the next milestone be an IPO?

Monish and I thought about IPO, but we realised that there are more important things to be achieved.

What has been the growth momentum at Icertis?

We are way above $100 million in ARR, and we have been growing at 50 per cent-plus for the last several years. In the last six months, from July to December, we sold to customers in 19 countries. Our users are in 90-plus countries around the world. Of course, the US is the largest by revenue, followed by Europe. In the Asia Pacific, we have a lot of customers in Australia and New Zealand. We have customers in Malaysia, Indonesia, Turkey, and South Africa. Asia Pacific is the third, but the fastest-growing region.

Any message for SaaS entrepreneurs in India?

The first message is not to be trapped by the thought that you have built an amazing mousetrap (product or services). In the concept of product-market fit, the bar for investors is usually pretty low. They look to see if you have one or two customers. Generally, at this point one raises a series A. That bar should be so high that the customer not only says he can use it, but also that there is no one else who can do this.

There is a reason why I say this. Daimler became a customer of ours in 2016, when we were a very small company. Daimler had a business problem: they were changing the company in a substantial way, because they saw electric cars coming. They wanted to become an agile company and they wanted to achieve this in double-quick time. When they looked at their processes they realised that they needed to change the way contracts were managed, because there was no flexibility in contracts with suppliers and customers. So, they started looking for great CLM products. Monish had built a product and our first customer was Microsoft, and they said that Icertis has a great product. It was not just about product-market fit. I would tell entrepreneurs to raise the bar.

The second point is to have massive aspirations. Dream big but keep your feet on the ground. Very early in our life we said Icertis will be the contract intelligence platform of the world.

The SaaS ecosystem has been growing rapidly, and the pandemic has acted as a catalyst. What is your take on the demand environment?

Digital transformation or digitisation was already happening. The pace has gone up now and cloud software is also gaining traction. SaaS gives global delivery of software at a very competitive price, and because there is no capex model, innovation is also fast.

India itself has become a market for software in a substantial way. Also, companies that were built 20 years back were services companies, essentially servicing the world. But now, with the product wave, software is really being used in India. Also, India has a thriving talent base for product development. We have a substantial and thriving India business with customers like Lupin, Genpact, Infosys, Wipro and Cognizant.