In the fourth quarter of 2018, Thoma Bravo, LLC, acquired Apttus, a middle office service provider that automates, optimizes and applies artificial intelligence to revenue generation and management of commercial relationships. Middle office manages technology, risk and information. Founded in 2006, Apttus was originally built to be used with the cloud-based software company Salesforce. Apttus provides contract lifecycle management and quote-to-cash technology as well as other middle office solutions. Its customers include hundreds of Global 2,000 companies.
Prior to its sale to Thoma Bravo, Apttus was once on track for an IPO and, at another point, thought Salesforce would be a logical buyer. Thoma Bravo has bought its fair share of enterprise software products over the years including Qlik, Sailpoint and Dynatrace. What follows is an excerpted version of a conversation with Frank Holland, who assumed the role of CEO at Apttus, in January 2019.
What changes have been made since the acquisition?
We were founded on the Salesforce platform. We enjoyed a healthy relationship with Salesforce for 10 years until they bought a CPQ solution. The founders decided to move toward Microsoft and IBM. We were building solutions with all three partners, and we were developing like crazy. We were spread thin. We needed to simplify and focus. We moved back onto the Salesforce platform and put all our engineers into that so our customers could count on us in one place.
We also have cut back on customization around our product. We focus on where we can compete the best. We focus on delivering success to the customers.
We are also looking at investments. The management team has changed and we are putting more rigor against great focus and brighter lines. We are still working hard every day on the health of the company.
How involved is Thoma Bravo?
They are on our board. They help pressure test our strategy, but they give us the freedom to run the company against the measures that the board set for us. Fortunately, our goals match up with Thoma Bravo’s goals.
What does the future look like for Apttus?
We are looking to add to the company. We are looking for adjacent products that our customers would benefit from. We have begun mapping out the market looking for the best fit. Our total addressable market is between $10 billion and $20 billion and we are just a fraction of that. There are niche products that have great go-to market strategies. Some are in the whole revenue management areas, and we address a big chunk of that market.
Do you already have an exit strategy in mind?
There are three main ways for us to exit – sale to a strategic player who wants to enter or strengthen its position in a market space, IPO, or sale to another PE firm. Right now, we are focused on building a strong company that is the standalone leader of the Middle Office space for a very long time to come. That is our focus. If we continue building a strong company, these options will always be on the table.