A Startup Service Announcement (from the good folks at SAP.iO)

“Allow me to re-introduce myself”
— Jay-Z

Today, when people think of SAP, they often think of a behemoth software company, that they may even interface with at work — as financial analysts, manufacturing operators, warehouse managers, HR managers, even sales reps. But it wasn’t always like this.

We used to move spreadsheets by the Ostringen

Once upon a time, long before SAP ERP applications touched 77% global transaction revenue, it was a startup. Back in 1972, in a pre-Apple, pre-dot com, pre-Facebook era when the title of entrepreneur was met with more skepticism than admiration, 5 founders spent their nights and weekends dreaming the impossible dream and in data centers of their first customers, such as Imperial Chemicals in Ostringen, Germany.

If it’s lucky, a startup grows up and crosses the chasm to becoming a fast-growing, small, then medium, and finally large enterprise. Perhaps even a publicly traded company. And when a company has achieved the incredible scope and scale as SAP has in their industry — they can probably do anything.

SAP realized that even though it could do anything, it shouldn’t do everything. SAP recognized that their raison d’etrewas to focus on solving the most complex business problems, that only a company that SAP can address. And, to best fulfill our customers’ needs to win in their markets today, there was a role for partners both large and small. Startups have a unique advantage to play at the cutting edge of technology and solve immediate customer needs. Their size and limited scope allow for a laser-like focus and agility that also provides a unique and personal dedication to customer success and delight.

However, for some time, startups had a few key challenges in working with SAP:

  • They perceived SAP was interested only if a startup built “on” SAP platform
  • They had difficulties integrating with SAP
  • Even if they did build on SAP, and build integrations, they did not have a systemic way to meet and solve customer problems

In short, they couldn’t see the value of working with SAP.

So, we had to re-introduce ourselves.

We’re the ecosystem’s #1 supplier

When we officially launched the SAP.iO Fund & Foundries in March of 2017, we were taking a bet that we could help “kick-start” an early-stage ecosystem comprised of great startups who could deliver value to our customers. We also realized we needed to find a new way to address the pains they consistently cited.

With SAP.iO, we focused on a new approach for startups: helping them build “with” SAP, via integrations or APIs. As a customer-centric company, we prioritized ensuring customers had access to the innovation that would help them win in their markets, independent of the environment where those applications were born or live. Our primary focus was on helping startups integrate to SAP applications and platforms, working with startups who run natively in AWS, Azure, GCP, or even SAP’s own Cloud Platform.

Startups that SAP.iO supports get strong and unprecedented exposure to our field and our customers. We have dedicated resources on the SAP.iO team that ensure SAP.iO startups get visibility to and interest from internal account teams, customers, and partners. For example, during Q1 2019 alone, at least 52 major customers visited SAP.iO Foundries in NY and SF alone specifically to meet with startups SAP.iO is supporting.

We’re 30 years removed but the vibe is still in our veins

So, over 30 years since going public are we able to create value for startups and the value of a start-up experience for customers? One test point for this thesis was whether startups building “with” SAP would be able to create demonstrable value sufficient to raise rounds of VC funding. To-date, we believe the indicators are justifying this thesis; 20 startups that we have invested in to-date have raised more than $100M in VC funding. These include a startup like BigID, where we first invested in a pre-revenue seed-convertible note, and has gone on to raise significant Series A and Series B rounds. While we don’t claim these startups raised money solely due to SAP.iO’s participation, it was certainly a bet — and an expectation — that the other investors hoped (or expected) SAP to deliver value in exchange for a small amount of equity.

In addition, many of the 110+ startups that have participated in the SAP.iO Foundries have also gone on to raise subsequent rounds of funding. The SAP.iO Foundries are 3–4 month, cohort-driven “residency” programs offering a 3 fold value-proposition: 1) Access to mentorship both internal and external to SAP, 2) Exposure to SAP technologies, and 3) opportunities to meet and collaborate with SAP customers. For this value proposition, unlike many other accelerator programs, we do not place an “equity tax” on the startup as a requirement for participation. In particular, during these programs we support startups building integrations to SAP platforms that will enable them to serve customers more effectively, and therefore drive scale, and enable a longer-term relationship with SAP beyond the program itself. Companies that have successfully raised money during or after SAP.iO Foundry programs from top-tier VCs include Ultimate.ai, Verusen, gtmhub, Slync.io, Cultivate, Clarisights, and many others.

So we have a public service announcement of our own. Startups — SAP is open for business.

Ram Jambunathan

Read my last blog, SAP.iO: Two Years, Three Key Learnings (or How David & Goliath Become Friends)