German SaaS platform Sastrify has raised a $32m Series B led by Endeit Capital. The round was split between $22m in equity and $10m in debt. It plans to use the cash to scale the team in the US and Europe and build new product features.
What does Sastrify do?
Sastrify was launched in June 2020 and is a platform for companies to buy and manage their SaaS tech stack, bringing all of their SaaS subscriptions under one roof. It’s one of a number of SaaS tools in Europe helping to save companies money, which cofounder and CFO Sven Lackinger says has become more important amid higher inflation and a more difficult fundraising environment. Lackinger says that the cost-saving angle helped the fundraise as the company had what he calls “product-zeitgeist fit”.
According to the startup, the typical company overspends by more than 30% on its SaaS costs and spends more than 400 hours a year managing its SaaS contracts.
How it works?
Sastrify looks at things like whether the number of SaaS licences a company is paying for fits the number of people working at the company, and whether the number of licences between tools make sense. A company might have five Google licences, but 800 Slack licences, for example, and Sastrify tries to understand if that makes sense for the company in question.
It also helps bring the cost of subscriptions down for clients at the renewal stage by using proprietary data to estimate how much of a discount is possible.
“Some companies are paying $50 a subscription and another company is paying $70 for the same subscription,” Lackinger says, “so there’s a lot of levelling out and creating transparency there.”
A company can use the platform to add new SaaS tools to its stack, renew subscriptions and bin tools it no longer needs.
“It’s a little bit like an HR software,” Lackinger says. “Recruiting is pretty similar to buying something, and managing payroll is pretty similar to paying for your SaaS solutions. We think of it as the first line for everybody to manage their software stack.”
The startup, based in Cologne, counts unicorns like sennder, Babbel and Pleo among its client base. The tool is offered on a rolling subscription basis, and starts at $30k per year, rising to “lower-six digits”.
Raising a Series B in 2023
Fundraising in Europe slowed to a snail’s pace in Q1 of this year. Lackinger says that raising Sastrify’s Series B felt like a “normal” fundraise compared to the market’s peak in 2021. He says that due diligence took around two weeks, and it took between 12 and 14 weeks to wrap everything up.
“Instead of ‘we’re going to do this, here’s a term sheet, we’re going to sign everything in two weeks’, people took more time to really understand the business [...] I think that was the biggest difference.”
Investors were specifically looking at:
- Sales efficiency, which for a SaaS company means the attainment of sales people and how well they're delivering.
- Company efficiency, like how much money is the company spending each month and how much revenue i 's adding each month.
Dutch investor Endeit Capital led the round, with participation from Simon Capital. Previous investors HV Capital, FirstMark Capital and TriplePoint Capital also invested.
What’s next for Sastrify?
Sastrify currently has six sales regions in Europe, plus the US. The US market will be a big focus for the team in the next few years, Lackinger says, and most of the post-Series B team growth will be focused on the sales team.
The startup currently has between 150-160 employees, Lackinger says, and by the end of next year he envisions that growing to between 230-240.
It’ll also use part of the raise to add new features to its product, including a usage analytics tool.