CLM Financial Model

Delivered September 16th, 2019

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Icertis

While there is no publicly available information to identify the Icertis customer acquisition cost, data were available to pull together the average revenue per Icertis user ($541,667) and the company's monthly churn rate (-0.2%). Below is an outline of the research strategies used to better understand why the information requested is publicly unavailable, as well as a presentation of the findings. 
AVERAGE REVENUE PER USERIcertis had 120 customers as of October 2018.
Icertis serves 2 million users across its 120 customers.
In 2018, Icertis generated revenues between $50-80 million.
The average revenue per user is $541,667. (see calculation)
MONTHLY CHURN RATEThe company had 100 customers as of September 2018. 
Icertis' compound annual growth rate over the past four years was 125%. 
The monthly churn rate is -0.2%. (see calculation)
Research Strategy:Despite an extensive search, the research team could not find data related to the company's customer acquisition cost. To find this detail, we first looked for an Icertis annual report, hoping to find clues as to how much the company spent on acquiring customers; instead, we found out that Icertis is a privately owned company that did not make its financial data public. Next, the team searched for third-party databases, such as Craft and Enlyft, to see if they had data on the customer acquisition cost of Icertis. Although we found data such as the number of customers and revenue, we did not find data on the customer acquisition cost. Finally, we reviewed news and industry publications, such as TechCrunch and PR Newswire, but none provided data on the customer acquisition cost.

CALCULATIONS
Average revenue per user = Revenue / User
 2018 revenue = ($50,000,000 + $80,000,000) / 2 = 130 / 2 = $65,000,000
Average revenue per user = $65,000,000 / 120 = $541,667
*Please note: For each of its 120 customers, Icertis likely has several thousand users on its platform due to the enterprise level of the companies it serves.

Monthly churn rate = (Users at the beginning of the month - Users at the end of the month) / Users at the beginning of the month.
Monthly churn rate = (100 - 120) / 100 = -0.2%
*Please note: Because of the company’s growth of 125%, its churn rate is negative.

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Apptus

The company's average revenue per user is $151,486 and its monthly churn rate is -0.06%. More information is provided below.
UNIT ECONOMICS: APTTUSApttus generates $224.2 million in revenue annually.
In 2016, Apttus reached $150 million in revenue at a growth rate of more than 60%. 
In May 2019, the company had 1,480 companies that use their services.
In June 2017, it had 600 customers with a total user base of 1 million.
Because the company is private, it does not disclose financial data. 
The company's average revenue per user is $151,486.
The company's monthly churn rate is -0.06%.
Research Strategy:Despite our efforts, we were unable to find data related to the company's customer acquisition cost. In order to provide the requested information, we tried using the following strategies:

First, we looked for the company’s annual report to find any clue as to how much they spend on acquiring customers, but instead we found out that Apptus is a privately owned company, therefore is under no obligation to make such data public.

We then looked at third party databases, such as CrunchBase and Enlyft to see if they provided data on the customer acquisition cost of Apptus. Through this search we found data such as number of customers and revenue, but we did not find any data related to the customer acquisition cost.

Finally, we consulted news and industry publications, such as Sramana Mitra and Forbes, but neither of these provided data on the customer acquisition cost.

We did the following calculations to provide the average revenue per user and the monthly churn rate:
Average revenue per user = Revenue / User
Average revenue per user = $224,200,000[1] / 1,480[3] = $151,486
Monthly churn rate = (Users at the beginning of the month — Users at the end of month) / Users at the beginning of the month.
Customers in 2017 = 600[4]
Customers in 2019 = 1,480[3]

Since the months between 2017 to 2019 is 24 months, therefore the average monthly customer acquisition for each month would be = (customers in 2019 — customers in 2017) / 24
                 = (1480 – 600) / 24 = 37 Customers

Customers in July 2017 would be = 600 + 37 = 637
Monthly churn rate = (600 – 637) / 600 = -0.06%
The company has a negative churn because it acquires more customers than it loses.

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Legal Suite

Legal Suite's average revenue per user as of 2018 is estimated to be about $3,060. The company has a churn rate of less than 5%. Legal Suite's customers increased from 400 in 2012 to over 600 in 2018.
AVERAGE REVENUE PER USERLegal Suite's average revenue per user as of 2018 is estimated to be approximately $3,060 
In 2018, the total number of Legal Suite users reached over 50,000.
Currently, the company has a total of 60,000 users. 
Legal Suite's revenue in 2018 was $153 million.
CUSTOMER ACQUISITION COSTThe total number of Legal Suite customers reached 100, 200, 300, 400, and over 600 in 2004, 2007, 2010, 2012, and 2018 respectively.
The company grew by 24% in 2014 and announced the acquisition of 25 new customers which increased the company’s orders by 47%. As of January 1st, 2015 Legal Suite reported to have hit 70% of its sales target for the fiscal year in both North America and Europe.
CHURN RATEThe company has a churn rate of less than 5% and customers retention rate of over 95%.
LEGAL SUITE BACKGROUNG OVERVIEWLegal Suite is a product of MDansby, the company was established in 1999 in the United States.
Legal Suite was created and launched in 2000.
Legal Suite was acquired by Sepeto Group in 2018
RESEARCH STRATEGYTo provide the requested information regarding Legal Suite, your research team began by scouring through the company's databases, media sources, software/application review platforms, company directories such as AdWeek, TechCrunch, SMBGuide, Crunchbase, Capterra, and Business Insider for information regarding Legal Suite average revenue per user, customer acquisition cost and monthly churn rate. While we were able to find information and data points we leveraged to estimate Legal Suite's average revenue per user, we could not find information on the customer acquisition cost and monthly churn rate of the company after a thorough search through these sources. We have outlined below the steps followed in triangulating the average revenue per user of the company.
ESTIMATION OF LEGAL SUITE'S AVERAGE REVENUE PER USERAverage revenue per user = total revenue / total number of users
Total number of user — 50,000 (2018) 
Total revenue — $153 million (2018)
Average revenue per user = $153 million / 50,000 = $3,060

We look through media sources, advertising and marketing statistics databases, and Legal Suite's database in search for data points like the company's marketing spend and the number of acquired customers to triangulate a proxy (for the company's customer acquisition cost). While we were able to find data to estimate the number of customers acquired by the company in 2018, information or data points to estimate the company's marketing cost to these new customers was not available.

The research team also understudy some new customers acquired by Legal Suite with focus on determining the cost expended in securing each of the customers as well as average cost leveraging information publicly available on Legal Suite and the customers' databases. While we were able to uncover the strategies employed by Legal Suite in acquiring their customers, information regarding the cost was not disclosed. Hence, we could not proceed with this strategy.

Your research team also look through Legal Suite's return policy data as well as media sources and software review platforms like GetApp, Capterra, Softpedia, SMBGuide and TechCrunch in search of data points around the number of returns that are made per annual or the company's annual customers retention rate. We could not find data points regarding customers retention rate or churn rate per annual after a thorough search through the above sources. The non-availability of this data points proved a stumbling block to forging ahead with this strategy. 

We then proceed to scour through the sources above for information regarding the average churn or customers retention rate per month or annual of Legal Suite's parent company (MDansby) products. A wide-reaching search through these sources provided no data points we could leverage to triangulate a proxy.

Since Legal Suite is a web-based application, your research team also attempt to triangulate a proxy for the product by leveraging its number of churns and the number of customers at the beginning of the churn period. We consulted web analytic sites like Alexa and SimilarWeb for this data we could not find data points regarding the number of churns and number of customers at the beginning of the churn period after searching through these sources.

We have concluded that information regarding Legal Suite's monthly churn rate and cost of customer acquisition is not available on the public domain after a thorough and wide-reaching through Legal Suite's databases, reputable media sources, technology/software review platforms, and company data aggregators' databases. The non-availability of information or data points to triangulate a proxy resulted from the company not publishing this information. The company is privately held and is under no legal obligation to provide the public with information regarding its financial transaction.

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Symfact

The average revenue per user is $18,467. The company's monthly churn rate is 0% from October 2018 to March 2019.
ADDITIONAL FINDINGSSymfact provides a single software platform to address the multiple domains of Contract and Compliance Management. 
In 2018, the annual revenue of Symfact is $2.77 million.
Symfact's customers are embedded in the US, Switzerland, and the UK. It serves industries such as aerospace and defense, banking and securities, and chemical and agricultural sectors.
As of October 2018, the number of users for Symfact was 150.
As of March 2019, the number of users for Symfact is 150. 
RESEARCH STRATEGYDespite an extensive search, we were unable to identify the company's customer acquisition cost. This is primarily because the company is private in nature and hasn't disclosed the cost.

We started our search by looking into the official website of Symfact. We examined the annual reports and press releases of the company. Since we are dealing with a private company, annual reports were not available. We only found information about the company’s products and features. 

Subsequently, we checked third party sources such as Zoominfo, Crunchbase, and Hoovers to obtain data about the revenue. We also examined PRNewsWire, Ab News, Gartner, Deloitte, Market Insider, and Epicos to check if any information on the user’s part is available. Through this search attempt, we were able to identify the company's churn rate from Oct 2018 to March 2019.

Since there are no precompiled data available regarding the marketing expenses, we tried to triangulate the information and looked for market reports and case studies related to contract management and compliance management companies in sources such as Market & Market, Market Watch, and Transparency Market Research. The reports provided the top players of compliance management software market along with the information regarding end users/applications.


As our last resort, we decided to look for information that is older than 24 months to identify the marketing expenses beyond 24 months. The idea was to check if any information is available regarding sales/sales promotion/ advertising expenses. We examined archived data. But, nothing significant turned up.

Triangulation1. The average revenue per userAverage revenue per user = Revenue/User
Revenue = $2.77 million 
User = 150 
Therefore, the average revenue per user = $2,770,000/150
 = $18,467
2. Monthly churn rateMonthly churn rate= (Users at the beginning of the month — Users at the end of the month)/Users at the beginning of the month.
Customers in October 2018 = 150 
Customers in March 2019 = 150 
Since the months between 2018 to 2019 is approximately 6, the average monthly customer acquisition for each month would be = (customers in 2019 — customers in 2018)/6
(150-150)/6
 = 0
Therefore, the monthly churn rate is 0%.

Did this report spark your curiosity?

Sources

From Part 01

Here’s how Icertis achieved a $500 million valuation in 4 years

yourstory.com

Publication Year: 2018

Icertis doubles down on APAC business driven by India; to scale revenues to 20% in 3-5 years

economictimes.indiatimes.com

Publication Year: 2018

Icertis profile on Craft.

craft.co

Icertis: What Makes It Great (Contract Lifecycle Management SolutionMap Analysis)

spendmatters.com

Publication Year: 2018

Icertis Cements Undisputed CLM Market Leadership with $115 Million Round

prnewswire.com

Publication Year: 2019

From Part 02

Apptus profile on crunchbase.

crunchbase.com

Apttus Reaches $1.3 Billion Valuation In New Funding Round On Road To IPO In Early 2017

forbes.com

Publication Year: 2016

Apttus commands 0.1% market share in eCommerce

enlyft.com

Publication Year: 2019

2017 IPO Prospects: Apttus Claims it is Halfway Ready to List | Sramana Mitra

sramanamitra.com

Publication Year: 2017

From Part 03

Careers - Legal Suite

legal-suite.com

Publication Year: 2019

Quotes

"We are proud of our customer retention rate over 95%, an essential marker of their satisfaction."

About - Legal Suite, leading software for in-house counsel and global provider of Enterprise Legal Technology®

legal-suite.com

Publication Year: 2019

Legal Suite Announces Strategic Acquisition by Septeo to Fuel Growth Globaly

legal-suite.com

Publication Year: 2018

Quotes

"Today, Legal Suite provides it's expertise to support legal performance in the fields of Enterprise Legal Management (ELM), Contract Lifecycle Management (CLM) and Governance, Risk and Compliance (GRC) for more than 600 customers and 50,000 users throughout the world. Through it's alliance with Septeo, Legal Suite’s ambition is now to grow to be one of the Top 5 global leaders of legal technologies."

C�leste s’empare de PacWan - Le Monde Informatique

lemondeinformatique.fr

Publication Year: 2019

Legal Suite Achievements in 2014 – a Record Year! - Legal Suite

legal-suite.com

Publication Year: 2017

Quotes

"Legal Suite, a market leader in Enterprise Legal Management Solutions, announces a record year of 24% growth in 2014. This report showcases Legal Suite’s strong market position as well as the maturity and sophistication of legal technology in both the private and public sector."
"Crowned by the acquisition of about fifty new customers, the increase of the Group’s orders amounts to 47 %. Legal Suite’s strong pipeline and commitments as ofJanuary 1st, 2015 having already achieved 70 % of its 2015 sales target, mainly on European and North American portfolios. "
"Among these new and existing customers who choose Legal Suite’s software solutions in 2014 are Agropur, St-Hubert, University of Ontario Institute Technology (UOIT), Université Paris 13, Transat, Banque de France, Kruger, Alethia Biotherapeutics, Veteran Affairs Canada, Bayer HealthCare…"