The $4.4 Mn seed funding round was led by Accel India and Together Fund
Spendflo will deploy funds to develop tech infrastructure, hire talent across verticals and grow business
The startup counts Airmeet, Crownpeak, LambdaTest, Urban Company, and Yellow Messenger as its customers
SaaS procurement startup Spendflo has raised $4.4 Mn in its seed funding round led by Accel India and Together Fund. The round saw participation from BoldCap and Signal Peak Ventures. Individual investors who were part of the round include founders and operators of Airbase, Zuora, Ivanti, CleverTap, Slintel, LamdaTest, Haptik, and Wingify.
Spendflo will deploy the funds to develop tech infrastructure, hire talent across verticals and grow business. It will also infuse money into doubling down on its go-to-market strategy in the US since a large chunk of its customers are based there.
Before founding Spendflo, Siddharth, while managing business operations of the US-based Volta Charging, was once asked to research about the SaaS industry and consequently, help the company trim its SaaS expenses. The research findings of Siddharth helped him encounter three major issues associated with the SaaS segment— decentralisation, opaque pricing and difficulty in optimising SaaS spends.
Siddharth shared his insights with his friend Ajay Vardhan, who was then working as an engineer with Tone. With the thought of addressing these loopholes in the SaaS industry, the two friends moved to India where they were joined by another aspiring entrepreneur, Rajiv Ramanan. Then, in early 2021, the trio co-founded Spendflo.
In essence, Spendflo buys, negotiates and renews SaaS products for high-growth companies as well as automates their entire procurement process. “We typically work with finance teams of high-growth companies and help them optimise their SaaS spends,” said Siddharth Sridharan, cofounder and CEO of Spendflo.
Besides, Spendflo ensures that each and every department of a company is equally involved in the entire SaaS procurement lifecycle. To enable this, it offers a centralised collaborative platform to its customers where their teams can freely share documents thereby, avoiding the overbuying of a SaaS product.
Spendflo recorded a 20-25% month-over-month (MoM) growth rate in the fiscal year 2021-22. It is presently clocking a monthly revenue rate (MRR) between $50K and $1 Mn, Siddharth shared.
Prior to this, Spendflo was a part of Atoms, a pre-seed funding program led by Accel. As a part of the program, the startup received $250,000 as a non-dilutive capital along with mentorship from industry veterans.
Spendflo primarily works with growth-stage companies that are either backed by private equity firms or venture capitalists, growing by 50-100% year-over-year (YoY). “We target companies where the average SaaS spend grows 25% every year,” Siddharth said.
Spendflow is working with more than 30 companies as of now. Its customers are mostly based in the US, Middle East and India. It counts Mindtickle, Lambda Test, Airmeet, Yellow Messenger, Urban Company and Crownpeak as its customers.
Its platform generates revenue through the yearly subscription model. It decides on an annual subscription for a company based on the SaaS expenses that it manages. For better understanding, Siddharth said that the startup’s prices its annual subscription between 1-5% of the entire SaaS spend that it manages for the customer.
It competes with the likes of Quolum, Zluri, Finly, Fyle, and Numberz.in in the SaaS procurement and management segment.
According to a report, the global SaaS market, which was pegged at $158 Bn in 2020, is poised to reach $307 Bn by 2026. While another report states that the Indian SaaS market presently generates $2-$3 Bn in revenue and owns nearly 1% share in the global SaaS market.
After reaching its full potential, the Indian SaaS market is also expected to reach $50-$70 Bn by 2030 thereby, increasing its share to 4-6% in the global SaaS industry, the report added.
In March, B2B SaaS startup Draup secured $20 Mn (about INR 152 Cr) from the US-based private equity firm HKW.
In January, Delhi NCR-based SaaS Labs bagged $42 Mn from Sequoia Capital India, Base 10 Partners and Eight Roads Ventures. Other angel investors including Amit Agarwal, Allison Pickens, Anand Chandrasekaran, and Michael Stoppelman also participated in the round.
In the same month, Ola’s cofounder Ankit Bhati was said to be launching a new SaaS venture named Amnic Technologies. The SaaS startup was reported to be raising between $15 Mn to $20 Mn from Sequoia Capital as part of its seed round.