Global spend on enterprise software was expected to reach $599 billion by the end of 2021, and new forecasts say it is now projected to grow 11.5% year over year to nearly $700 billion in 2022.
The average company can have more than 100 software contracts, and Tropic’s technology not only brings a click-and-approve approach to buying and managing all of that software, it also helps customers uncover savings on purchases — an average of 23%.
We last checked in on the company last August when it raised $25 million in Series A funding. The company is back six months later with nearly double the investment, a $40 million Series B round of capital led by Insight Partners, to raise a total of $65 million.
Since we spoke to CEO David Campbell, Tropic has continued its busy streak. At the time of the Series A, the company saw 100% quarter-over-quarter revenue growth and added more than 60 customers.
In the past four months, Campbell said the company more than doubled its revenue and has 150 customers, including Notion, Nextdoor, Faire and Flatiron Health. It is also up to 85 full-time employees after starting with 15 in 2021.
Image Credits: Tropic
He revealed that the new funding round took the company by surprise — the result of standard check-ins by investors — in a deal that came together quickly. He attributes Tropic’s growth to companies like his that are raising money and expanding. The global pandemic also put the need for better software procurement processes at center stage as uncertainty grew around software costs, sometimes the biggest spend behind payroll, and how to control them.
“We’ve tapped into a need that is prevalent, and awareness is growing in our space as companies try to get a handle on software spends,” Campbell added. “Procurement was traditionally led by legacy playing and initially designed for hardware, not software. However, there has been tremendous proliferation of the need in software, and with the market catching on, we have been in the right place and the right time for that.”
The new funding will go into R&D for major software elements, like automation, as the company aims to be an end-to-end procurement system of record. Campbell will also begin making key executive hires and expand in different areas across the product.
Meanwhile, the company is preparing for another product release and expansion into North America and internationally to increase the size of the market in the next two quarters.
Teddie Wardi, managing director at Insight Partners, said that when he met the Tropic team, he was “not only impressed by their vision for the platform, but how they were building the product.” He saw what they were doing as an opportunity to replace traditional pen-and-paper methods and the use of legacy platforms meant for other things than software.
“Procurement doesn’t have to be all about the cost center, but the topline driver is to reduce the time spent doing this and ensure everyone has the right tools,” he added.