On February 18, 2021, Torii, a management and automation solution for Software as a Service (SaaS) portfolios, announced a $10 million Series A funding round led by Wing Venture Capital with participation from its prior investors, Entree Capital, Global Founders Capital, Scopus Ventures, and Uncork Capital.
SaaS management is a unique technology challenge for the enterprise both because of the sheer number of applications that are running in a large business (Amalgam Insights estimates that organizations with over 1,000 employees average 500 or more apps being used in production for business purposes) and the decentralized nature of SaaS purchases often allow any employee to bring a new app into the business without direct security, governance, or management input from IT.
Over the past year, Torii has increased revenue by 400% and grown to 25 employees. Torii’s role in SaaS management focuses on providing a discovery engine to find all of the SaaS in an organization and then to provide automation to support the service orders to add and remove employees from each account, which is comparable to the telecom terminology of MAC-D (Moves, Adds, Changes, and Disconnects). Torii’s discovery capabilities are aided by integrations with identity management vendors solutions such as JumpCloud, Okta, Onelogin, and SailPoint as well as connections to reimbursement software such as Concur and Expensify. From a usage perspective, Torii also supports a variety of direct integrations with enterprise software solutions, provides web browser extensions to find new apps, and supports an app directory for SaaS applications being used in the enterprise.
As an interesting aside, Torii was founded by Uri Haramati, who was a founder of current social media darling Houseparty.
Context for this funding
Torii’s growth has been driven by the increased need for SaaS and was accelerated both by the global COVID-19 pandemic and the subsequent need to digitize workflows and onboard all remote employees to applications capable of managing work. The core driver associated with Torii and its competitors comes from the need to manage SaaS portfolios and licenses. This need is reminiscent of a similar challenge that was created a decade ago to manage the rapidly growing fleets of smartphones and tablets that quickly infiltrated the enterprise. But the biggest difference that Amalgam Insights sees between these two areas is that SaaS management is a purely digital challenge that can run across a variety of devices whereas mobile device management also included a physical device component.
This round of funding comes at a time when SaaS management is growing both in awareness and investment. Based on the growth of prior IT trends over the past 20 years, Amalgam Insights believes that the current market opportunity for managing SaaS across financial, operational, and technical management is over $2 billion and continues to grow as the SaaS market as a whole is growing. Given that even large enterprise SaaS applications such as Salesforce, Workday, and ServiceNow are continuing to grow 20-30% year-over-year, it is no surprise that Amalgam Insights expects the SaaS market continue growing 20% in 2021 and for the SaaS management opportunity to grow at roughly the same rate.
As of 2021, SaaS Management has become a legitimate market of competitors that have their own specializations, strengths, and market focus. In this market, Torii competes with the likes of startups Bettercloud, Blissfully, Cleanshelf, CoreView, Productiv, and Zylo to manage SaaS portfolios in the enterprise space as well as traditional Software Asset Management, IT Asset Management, and security providers such as Flexera, SailPoint, ServiceNow, and Snow Software.
Recent examples of investment in the SaaS Management space include
- Zylo raising a $22 Million Series B round in September 2019
- CoreView’s acquisition of Alpin in October 2019 and raising a $10 million Series B round in October 2020 to manage Office 365.
- Productiv raising a $20 million Series B round in November 2019
- Cleanshelf raising an $8 million Series A round in March 2020
- Bettercloud raising a $75 million Series F round in May 2020
- SailPoint’s acquisition of Intello in February 2021
What to expect from Torii
With this round of funding, Amalgam Insights expects that Torii will invest in talent and resources to pursue what is still a massive latent market. From a tactical perspective, Torii will likely double its employee size over the next year based on both its funding and revenue-based growth, which will help as it both enters net-new deals and competes against its peers in the SaaS Management market.
Amalgam Insights also expects that Torii will be pressed to pursue a wide variety of opportunities associated with audit, compliance, process and workflow automation, service automation, sourcing and contract management, and security management. This set of challenges and opportunities will require focus in the short-term and will likely require another round of funding in the next couple of years to fully pursue.
These are interesting times for the SaaS Management market as a set of vendors have started to coalescence in this space. As these companies grow over the next three-to-five years, the size of their market opportunity will potentially double with at least a couple of these companies achieving exits along the lines of AirWatch (now part of VMware), Apptio, MobileIron (now part of Ivanti), and Tangoe. With this round of funding and the opportunity in place, Amalgam Insights believes that Torii is well positioned to be a competitive option in the SaaS Management market for the next few years and should be considered by enterprises seeking to discover their hidden SaaS accounts and automate SaaS across the hundreds, if not thousands, of apps currently charged to the company and supported on corporate devices and the corporate network.