Thinking About Thinking

Why Volition Invested In Pramata

Posted in Founder-Owned Businesses, Growth Equity, Venture Capital, Volition Capital by larrycheng on December 17, 2015

This week, we announced a $10M growth equity investment in Pramata.  I am very honored to be joining the Board and am excited to work with the team going forward.  So, what do they do and why did we invest?

What does Pramata do?  

It’s very simple.  Pramata extracts key information out of enterprise customer contracts and puts the data into CRM systems so that enterprise sales reps, sales ops, and account managers can have a clean and accurate view about an existing customer relationship.  What’s so hard about that?  Well, it might not be hard if you are an enterprise with 5 sales reps, selling one product, to 30 customers, on a standard contract.  But, what if you have hundreds or thousands of reps, all across the country or world, selling dozens or hundreds of products, to thousands or tens of thousands of customers, with several distinct buyers within the same customer, mostly on negotiated non-standard contracts, with SLAs, addendums, etc.?  Well, then it gets very complicated, very quickly.  But, that is just direct sales.

What if you throw in channel partners who also sell your products with their own contract structures?  It’s even more complicated.  And, what if your company is acquisitive, so you are regularly layering in companies with overlapping customers on different contract structures?  Then the complexity is nearly impossible to manage.  The net of it is for a large enterprise that has negotiated enterprise customer contracts – a single customer relationship can be buried in hundreds, if not thousands, of complex and ever-evolving contractual documents.

When that’s the situation, it becomes incredibly challenging to answer seemingly very simple questions that sales reps and account managers want to know such as:

  • What products or services has this customer bought?
  • How much does this customer spend and on what?
  • What are key dates, milestones, expiration periods, etc. on their contract?
  • How much are they paying and what discounts are in effect?
  • Are there any non-standard terms or overlapping agreements?

It becomes even harder for sales ops to have visibility across their customer base to answer important questions like:

  • Which customers are expiring in the next 6 months?
  • Which customers bought x product, so we can focus on upselling y product?
  • Which customers have non-standard pricing?

Having a clear view into a customer relationship has very practical implications.  Account managers know when to approach customers about renewals or products to upsell.  New reps can get up to speed quickly on existing customer relationships.  Bills can actually be right (which is a bigger problem than meets the eye).  Pricing and utilization can be optimized across a customer when you have a holistic view into the relationship.  Net net, having a clear view of customers can have direct and profound revenue and productivity implications for enterprise sales teams.

Why Did We Invest In Pramata? 

There were lots of really important reasons why we invested in Pramata, and then one indispensable reason.

Among the really important reasons:

  • Great Product-Market Fit.  We really believe the problem Pramata has identified and the way they solve it can provide tremendous value across a broad cross-section of enterprises.  It’s a big pervasive problem that they have cracked the code on solving.
  • Blue Chip, Highly Recurring Customers.  It’s not often we see a company start at the high-end of the market – winning the biggest and best brands first.  Industry leaders like Cisco, Medtronic, Centurylink, FICO, Comcast among many other customers provide great validation for the value of the product.
  • Nirvana Customer Feedback.  The before Pramata/after Pramata feedback from existing customers was not just good – it was described as a game-changer.  A number of customers talked about how Pramata is the single-most important vendor that the sales team works with.
  • Proven Delivery Model.  They can deliver the goods.  They give customers a great customer experience.  They live up to their promises.  They do what they say they’re going to do.  Their delivery model has been refined and hardened taking on some of the largest companies in the world.
  • Strong growth.  Of course, this is indispensable for us as a growth equity investor – but the company is experiencing strong growth as the market becomes more aware that the solution exists.  We certainly expect that our investment will drive even stronger growth ahead.

But, the most important reason we invested was apparent the very first time I met with Praful Saklani, CEO, well over a year ago – philosophical alignment and shared values with the management team.  From the very first time I met Praful, and met other members of the Pramata team, it was very clear to me that we think alike and share common points of view on how to build a business.  We share an old-fashioned sensibility that businesses should be built off of delivering real value to happy customers, egos should be checked at the door, and we should do right by the people around us.  My reaction the first time and every subsequent time I’ve met with the Pramata team is this is a Volition management team.  And, I’m thrilled to make that a reality today.

 

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