Planning for Success: Our Journey with Adaptive Insights
Everybody plans and Adaptive Insights planned to succeed. Founded in 2003 by Robert Hull, Adaptive Insights found a gap in the rapidly growing corporate performance management (CPM) market and worked hard to become the market leader they are today. With their recently announced acquisition by Workday Inc., we’ve decided to look back on our initial investment in Adaptive Insights and see how through planning, hard work and a dedicated team they have become the top cloud-based financial planning solutions.
Our first investment in Adaptive Insights was in December 2007. They were only at US$1M in revenue and we led the Series D round of US$10M as a part of RBC Venture Partners. When we first met the Adaptive Insights team, we realized the team had as much potential as the company and product. They were building a cloud based financial planning solution that would target the relatively untapped market of small and midsized businesses (SMB). According to Gartner in 2006, the estimated total software revenue (license plus maintenance revenue) for CPM suites would exceed $1.5B. This was largely driven by legacy and spreadsheet system replacement needs and drive for greater awareness due to large-vendor involvement and an increased demand in the mid-market. Rob Antoniades and his partner Dave Unsworth had conviction that Adaptive Insights was going to make a splash in this market.
In the early days of cloud and SaaS based business models, the infrastructure wasn’t as widely adopted as it is today. Many solutions did not leverage the cloud, and having on premises software was the norm. Our team was closely tracking trends in cloud and SaaS based infrastructure at this point. We believed that as these tools grew and were further developed cloud-based software was going to take the lead. We had already invested in a company that performed a similar financial forecasting and planning function and they were working closely with some large financial institutions. Their product however was a custom application. To scale we believed that you needed a singular platform that could be deployed across organizations. We found this model in Adaptive Insights. Some of our portfolio companies had begun to use the open source version of Adaptive Insights solution and really liked the product. This free version allowed you to build simple budgets but once clients begun using the software they realized the true value of the product.
We also recognized a pain point for many SMBs: collaboration on financial planning. Spreadsheets were and still are in most cases, the main ways that finance departments planned. This provides little room for collaboration and sharing of content and can often create complexities within an enterprise. Adaptive Insights was providing a seamless solution that would allow for employees to collaborate effectively across an enterprise and to make smarter decisions faster.
Few investments are ever a straight line up and to the right. They all face their challenges, and Adaptive Insights is no different. But when faced with challenges, they have always been able to overcome them. Whether the financial meltdown of 2008, the shifting sands of the industry, our acquisitions, partnerships, a rebrand and product launches, the stewardship of Bill Soward, John Herr and most recently, Tom Bogan, should be credited for these successes. Each has left their mark and contributions to the success of Adaptive Insights.
Since our initial investment, we have become partners with the Adaptive Insights team and helped them plan for their future. We watched the team as they expanded their offices from the original HQ in California to a global company now with offices in Australia, Canada and Europe. The company also continued to grow in customer base and decided to launch Adaptive Live, their now annual client conference that attracts over 1,500 finance professionals from around the globe. We have celebrated with them as they have launched new product offerings such as sales performance, expanding their software into new and exciting territory. Naturally, with increased clients and product offerings also comes increased revenue. In 2017, we celebrated with the team as they crossed another milestone and surpassed US$100M in annualized revenue and joined an elite class of SaaS companies, where fewer than 1% of software businesses ever reach this milestone.
Adaptive Insights has now reached another milestone: an acquisition by Workday Inc. “We share a mission to accelerate finance and business transformation in the cloud. As a Workday certified partner since 2015, we have come to appreciate the numerous parallel characteristics of our two companies. Our core company values are well aligned in terms of strong employee and customer centric cultures and we both have a commitment to delivering easy-to-use applications that delight our customers.” – Robert Hull, founder of Adaptive Insights.
As our journey with Adaptive Insights ends now that the acquisition has closed, we’re excited to see what the future holds for both businesses. It has been a pleasure to work alongside our co-investors, other board members and the team at Adaptive Insights over the last 10 years all of whom we consider friends.