Contract lifecycle management provider Icertis secures $150 million in debt to avoid rivals – TechCrunch

It’s Halloween. And, if you are a contract management software publisher Icertis, it’s payday. After raising $115 million in 2019, Icertis today secured $150 million – $75 million of convertible debt and a $75 million revolving credit facility – in a combined tranche that brings the total capital of the company raised $520 million.

By taking the debt route, Icertis avoids having to answer the delicate question of valuation in a particularly difficult economic environment. (Icertis was valued at $2.8 billion in March 2021 and would have as high as $5 billion earlier this year, but valuations in technology are down sharply.) The convertible debt allows Icertis to pay its loan obligation with equity or stock, while the credit facility allows it to borrow and repay on an ongoing basis.

CEO Samir Bodas was rather vague about plans for the new cash, but told TechCrunch in an interview that it would involve “accelerating the application of transformational technologies such as artificial intelligence, natural language processing, machine learning and blockchain to deliver material, unique and consequential value to customers. This is all rather ambitious (and, truth be told, a bit of a hype), but Bodas asserted that Icertis is well positioned to push back rival startups in contract management.

“Industry analysts like Gartner and Forrester refer to our category as contract lifecycle management (CLM), but Icertis differentiates itself from traditional CLM vendors,” Bodas said. “Not only do we ensure efficient contract creation and negotiation, but we use AI and natural language processing to structure contract information into on-demand data and connect that data to operational systems…to automate processes, maximize contract value and ensure compliance.

Founded in 2009 by Bodas (a Microsoft and Aztecsoft veteran) and Monish Darda (previously an executive at BladLogic), Icertis provides cloud-hosted tools to manage corporate purchasing, sales, and contracts, including tools capable of reading and analyzing contracts to reduce risk. management reports and automatic monitoring of obligations. The platform systematizes contracts and related documentation, extracting data such as contact details and clauses to determine contractual commitments and monitor them to ensure compliance.

Ingested contracts can be used to model business relationships in Icertis, allowing users to identify contracts missing the necessary clauses to comply with regulations like GDPR. Bodas claims that the AI ​​systems that power this and other features of the Icertis platform are among the most capable of their kind, capable of handling over 7,000 different contract types across 11 verticals.

Icertis’ contract management software, which runs in the cloud.

“We are forging and driving a new category of technology – contract intelligence – which uses AI to automate processes and deliver insights with structured and connected contract data to digitally commemorate the purpose of each business relationship and ensure that the The intent of these agreements is fully realized,” Bodas said.

It’s a bold statement. But it’s true that Bellevue, Wash.-based Icertis is already one of the largest and most successful contract management software vendors to emerge in recent years. Bodas says the company exited 2021 with annual recurring revenue north of 0 million and recently surpassed $200 million in recurring revenue. He declined to disclose the size of Icertis’ customer base, but noted that current customers include Microsoft, Boeing, Google, Johnson & Johnson, Sanofi, Mercedes-Benz and Qantas and unnamed public sector agencies.

This year, Icertis announced a partnership with SAP to make Icertis the CLM solution of choice for SAP customers. (Alongside Softbank, SAP has a minority stake in Icertis.) Bodas says it will create a contract management “ecosystem” for SAP customers through integrations with SAP solutions like Ariba, Fieldglass, S/4HANA and SuccessFactors.

“In this economic downturn, we believe that contracts, which govern every dollar in and out of the business, will become the go-to asset as they are an untapped source of invaluable business value for reducing costs, managing risk, ensuring compliance and drive revenue,” Bodas said. “We are confident that contract intelligence will emerge from this downturn as the company’s fifth system of record, and that Icertis is positioned to lead it for the long term.”

Investors see to promise in legal contract management technology for procurement, sales, finance, legal and HR like that of Icertis — perhaps because of the huge addressable market. The contract management lifecycle market is expected to grow from $1.5 billion in 2019 to $2.9 billion by 2024, according to markets and markets.

Early adoption measures have certainly been promising, with a recent Bloomberg Law survey showing more than half of in-house lawyers used contract management programs in 2020. Bodas says Icertis’ platform alone processed over 10 million contracts worth over $1 000 billion dollars in more than 40 languages ​​and more than 90 countries

“Contracts are an invaluable source of original data – documenting and governing the rights and obligations between a company and its suppliers, customers and employees. In other words, contracts provide a single source of truth for business relationships,” Bodas said. He gave an example: “Recently, clients have turned to Icertis to help them better manage inflation. Do their contracts contain clauses allowing them to adjust prices in the event of inflation, how often can they increase prices and by how much? We provide this information instantly, so that every right in a company’s contracts can be realized for maximum value.

Among Icertis’ competitors are ContractPodAI and Sirion Labs, which respectively raised $55 million in July and $85 million in May for their automated contract management software. Another formidable rival is LinkSquareswhich landed $100 million in April to develop its platform that combines legal analytics with contract lifecycle capabilities.

For what it’s worth, Icertis eclipses them in size, with more than 2,000 employees spread across offices in New Jersey, Chicago and elsewhere.

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