At this point, is no surprise to anybody the fact that Salesforce is the largest SaaS business in the world. It owns a quarter of the CRM market and has had an average growth of more than 25% a year over the last 10 years. Around 95% of Fortune 500 companies use Salesforce. The independent software vendor ecosystem nurtured by Salesforce is a critical revenue and growth driver for the business, growing economic activity on its platform, encouraging outsourced innovation and supporting customer lock-in as enterprise clients partner with these businesses to tailor their own Salesforce experiences.
Yet despite this huge potential, research by Unaric, a company building the world’s leading Salesforce product suite by buying, scaling and consolidating Salesforce-focused Independent Software Vendors (ISV’s), has found that 62% of Saas companies built on the Salesforce ecosystem have an ARR of less than €4.5 million and remain under-invested, often failing to realize their potential. This also reduces their exit options significantly. At the same time, almost three-quarters of Salesforce companies are bootstrapped meaning they face challenges around access to growth capital, retaining talent and expanding their enterprise customer bases. Since larger companies can be unwilling to buy products from multiple smaller providers, they often forgo a superior product simply because it is offered by a startup company.
In order to solve this, Unaric has raised €32 million in a debt and equity Seed round from LocalGlobe, Concentric, FJ labs and Atempo Growth. Leading angel investors from the ecosystem, such as OwnBackup founder Sam Gutmann, SaaS Guru Dave Kellogg and Hotjar founder Johan Malmberg, also participated.
James Gasteen, co-founder and CEO, says: “Unaric was started by founders for founders to help them release the value they have created. There is a mismatch in the Salesforce ISV ecosystem which we have experienced personally and we know how to put it right. We believe that by building suites of products that match more closely the needs of enterprises, we can help companies to significantly increase their sales, scale their businesses and sell to corporate buyers who would not normally buy from individual vendors. When software businesses become part of Unaric we can take all the admin off the founders’ plate and accelerate their growth channels, so that they can carry on building a great technical product.”
As the largest SaaS ecosystem in the world, more than 4,000 independent software vendors (ISVs) supply software products connected to Salesforce, worth €26 billion a year in 2021, predicted to grow to €62 billion in 2026. These vendors offer point solutions but often find it difficult to scale, despite having strong technical products, due to the unique nature of their business models within this ecosystem. It takes a specific set of skills, knowledge and experience of the Salesforce ecosystem to unlock this potential – all of which Unaric’s founders and management team have gained from a combined 40 years founding, building, running and merging companies in the Salesforce sector.
For those reasons, Unaric is building the largest suite of apps on the Salesforce platform, through a unique acquisition approach. Unlike other software consolidators, it focuses on Salesforce products alone. By combining single-point solutions together, Unaric is creating industry or function-specific product suites that provide enterprises the best technology they need to enhance and better their Salesforce experience.
Julian Rowe, General Partner at LocalGlobe says: “With highly successful, repeat entrepreneurs at the helm, Unaric is one of the most exciting businesses we have seen in the enterprise sector. Peter and James’s ambitious plan will create real value for enterprise customers, as well as unlocking strong new investment and commercial opportunities for the companies it acquires. The founding team have the perfect skills and experience to consolidate this sector, but also drive value across its portfolio of companies in highly tangible and impactful ways. We are hugely excited by the potential to better serve the enterprise sector with superior technical products that find a much bigger market.”
Other notable private investors joining the round include Daniel Waterhouse, General Partner at Balderton Capital; Sujay Tyle, co-founder of unicorns Frontier Car Group & Merama; Philipp Triebel, co-founder Sellerx; Patrick Aisher serial SaaS entrepreneur & founder of Mountain Labs and German football Star Mario Gotze.
Unaric is aiming to acquire 30-40 companies in the next three years. The first, in what is likely to be a string of deals, is announced today with London-based Salesforce module Bolt, a company with over 1000 customers, joining the Unaric family.
Founded in 2021, Unaric’s exceptional founder and scaling experience can help consolidated companies increase sales by at least 10X through cross-selling opportunities, knowledge-sharing and a shared central infrastructure including a common product and engineering hub to support organic investment opportunities. With this enterprise-centric approach, Unaric will unlock significant value for enterprises leveraging the Salesforce ecosystem.
It’s a consolidation approach that has already seen success in vertical markets – most notably with Veeva Systems (€28 billion market cap), Ncino (€2.7 billion market cap) and also with horizontal consolidators such as Constellation Software, a €39 billion market capital company. Unaric will apply a similar approach, with a strong focus on central services to drive value across products.