For companies struggling to get on top of multiple software-as-a-service (Saas) subscriptions, signing up for yet another SaaS solution might not seem the most obvious response. But Siddharth Sridharan, co-founder of Spendflo, which is today announcing a $4.4 million seed round, has a promise. “We should be the last SaaS contract you ever have to sort out for yourself,” he says – and if not you’ll get your money back.
Spendflo aims to provide a one-stop-shop for companies benefiting from the SaaS revolution but losing control of their contracts. It gives customers transparency over how much they’re spending on SaaS subscriptions, visibility of how much they’re using them, and access to savings on both existing and new subscriptions.
The SaaS market worldwide has boomed in recent years and is now worth close to $330 billion a year, Spendflo points out. SaaS products are revolutionising the way businesses source IT. Rather than having to install complex technology on-premise, businesses sign up for solutions accessed quickly and easily through the cloud. IT doesn’t have to do technology procurement for the rest of the business; instead, every function can buy the SaaS tools it knows it needs for particular jobs.
So far, so much the better. But there is a downside to this approach. The average business now has well over 100 SaaS subscriptions costing more than $1 million a month, Spendflo points out. No single individual or function in the business – not finance and not IT – has visibility of all those subscriptions in one place. Spending can spiral out of control without the business having any idea whether each SaaS solution is actually being used.
That’s where Spendflo comes in, explains Sridharan, who came up with the concept while running business operations at the Californian electric vehicle specialist Volta Charging. “Every quarter, my CFO would complain to me that we were spending too much on SaaS solutions, but I didn’t know who owned the contracts or how they were using them,” he recalls. “I got so fed up and I also realised I couldn’t be the only one with this problem.”
Last year, Sridharan teamed up with co-founders Ajay Vardhan and Rajiv Ramanan to commercialise a solution. The Spendflo platform enables a business to track all of its SaaS tools and subscriptions in a single location. The platform provides crucial data on how much the business is spending on each subscription, as well as when contracts are due to be renewed; importantly, it also provides usage data, so the business can see whether it’s getting value for money.
In addition, since Spendflo can see what multiple businesses are paying for the same SaaS solutions, it is in a position to help customers secure substantial savings; it negotiates discounts – both upfront and for existing subscriptions – on behalf of its customers, based on its 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 in lower subscription costs than we charge you, we’ll refund the difference,” promises Rajiv Ramanan. “Your annual subscription to Spendflo will be less than the savings that it secures your business.”
It is an alluring pitch – but are SaaS vendors prepared to play ball given that this could mean lower margins for them? In fact, says Ramanan, most vendors have been enthusiastic about Spendflo. “They are much happier dealing with data-driven customers who understand what they should be paying,” he argues. In any case, Spendflo manages the relationship between vendor and subscriber, ensuring new subscriptions get up and running more quickly, and easing renewals; in this sense it offers value to SaaS vendors too, who are often frustrated by the way approvals get stuck in customers’ email trails and administration systems.
The business has certainly hit the ground running, growing at a rate of 25-30% over the six months since its launch. The company is already managed tens of millions of dollars’ worth of SaaS subscriptions for customers – and says it has secured an average saving of 23% on each subscription on their behalf.
Such success has not gone unnoticed among investors. Spendflo started life with support from Atoms, a program set up by the global venture capital firm Accel to support start-up businesses with pre-seed finance. Today, it is announcing 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 businesses in the SaaS sector.
Spendflo expects to deploy most of the capital in its go-to-market operations in North America, where it is growing rapidly. It also sees potential for further product development, particularly around the buyer experience for purchasers of SaaS solutions, who must juggle issues raised by finance, security and procurement before going ahead with new subscriptions. “There has been no way to buy, track and optmise SaaS solutions, but that’s why we exist,” adds Sridharan.