StartUp Circle: How did SirionLabs lead AI-Powered Contract Lifecycle Management in the Industry?

Businesses that engage in data-driven decision-making experience 5-6% productivity gains on average. Yet, finding the data to drive those decisions is what most enterprises struggle with. This is especially true when it comes to managing complex business contracts, which clearly define what each party is responsible for (obligations) and what happens if things go wrong (risks). When things do go wrong, enterprises spend billions of dollars and thousands of man-hours manually searching and extracting critical business data locked away in their contracts. SirionLabs understand that administering contract data is time-consuming and tedious. The AI-led extraction engine by SirionLabs simplifies this process by leveraging natural language processing (NLP) and machine learning to identify, extract and structure unstructured contract content.

Thus, CIOL took an opportunity to talk to Mr Ajay Agarwal, Co-founder & CEO, SirionLabs. Here, he shares the insights on SirionLabs and the AI-Powered Contract Lifecycle Management Industry.

What is the vision behind SirionLabs?

 SirionLabs was born in 2012 with the vision to help businesses realize the full value in their commercial engagements through its AI-powered contract lifecycle management (CLM) platform.

Commercial engagements between enterprises - whether with suppliers or customers - have become increasingly complex over the past 10-15 years - especially driven by the emergence of services as the dominant spend category. A recent study by Forrester and US BEA shows that, on average, enterprises today spend 58% of their procurement budget on buying services (vs. 42% for goods/commodities).

Unfortunately, the legacy analog CLM solutions have failed to keep pace with this evolution. The traditional CLM industry has only offered a partial solution as it has focused on automating the process of creating new contracts - but offered little functionality for tracking contracts after signature - where a majority of the value resides in today’s services-centric procurement landscape.

 As a result, only 15% of Fortune 500s are able to measure performance against the contract in their commercial engagements. For those who do, it requires a lengthy audit spread across multiple teams. The remaining 85% lose 15-20% of their annual contract value due to invoicing errors, missed deliverables, claims and disputes, etc. - translating into a massive $2-3 Trillion of enterprise value lost every year.

To address this gap, Sirion built an AI-powered CLM platform for managing the complete end-to-end contracting lifecycle on a single platform. From creating new contracts efficiently to ensuring granular monitoring of contractual deliverables, auto-validation of the invoices and data-driven relationship management, Sirion acts as a central nervous system for both buyers and suppliers in enterprise engagements. This holistic approach delivers improved savings/revenue for enterprises while driving improved business outcomes and better collaboration in commercial engagements.

How does the platform work?

Sirion leverages cutting-edge technologies including AI, NLP, and machine learning to auto-extract key information from contracts - expected outcomes (e.g. obligations, service levels), computational objects (e.g. base charges, rate cards, pricing adjustments) and risks (e.g. regulatory, liability, indemnity). This data is fed into Sirion’s powerful algorithms and workflows allowing auto-computation of performance requirements. Sirion integrates with other enterprise systems (P2P, ITSM, GRC, ERP) enabling an automated, real-time validation of supplier performance against the underlying contractual obligations and service levels.

Further, Sirion performs auto-validation of invoices against the performance and contract data resulting in easy identification of invoice discrepancies. By leveraging a permissioned-ledger architecture (similar to what is used in blockchain applications), Sirion enables shared access to the engagement data for both buyer and supplier teams, creating a single-source-of-truth across all aspects of the engagement eliminating friction and improving trust, alignment, and collaboration between the parties.

This holistic approach delivers improved business outcomes, reduction in spend leakage of up to 10% of annual spend, enhanced buyer-supplier relationship, and a 60% reduction in contract governance cost. In customer engagements, Sirion’s integrated contract management approach enables 2-5% incremental revenue, increased profitability, enhanced compliance, and stronger relationships in enterprise accounts.

How did you come up with the idea? Tell us about the journey and the team at SirionLabs

I am a lawyer by training and began my entrepreneurial journey 15 years ago when I founded my first company UnitedLex Corporation - which is today the leading alternative legal services provider in the world with over $300M in annual revenue. As part of one of our largest customer engagements at that time, we were helping a large IT services supplier to keep track of their contractual obligations to their strategic customers. This is when I realized that the existing capabilities for post-signature management of strategic contracts were extremely basic and manual even for most Fortune 500 companies. I recognized the significant market potential for a specialized technology product to simplify this challenge for both buyer and supplier organizations.

After I sold my stake at UnitedLex, I was invited to serve as an entrepreneur-in-residence at CodeX, the Center for Legal Informatics at Stanford University. During this time, I further investigated the potential to automate contract governance processes through a combination of AI, ML and NLP.

As this journey was unfolding, I met my SirionLabs co-founder Claude Marais. Claude has a very deep domain background having served as the global leader for contract management and strategic sourcing in GM's $3bn/year ITO organization and earlier handled leadership roles in the Procurement and IT organizations at The Coca-Cola Company. Subsequently, Claude pioneered ISG-TPI's supplier governance practice and grew the practice to $11bn in managed TCV. As he managed this growing business through a manual, services model, he realized the transformational value that technology could offer to clients by automating these post-signature governance processes.

My other co-founders, Kanti Prabha and Aditya Gupta were part of my team at UnitedLex and played critical roles in building the contract management solution in the UnitedLex client engagement that I described earlier.

All of us came together in 2012 to start SirionLabs - with a common vision to transform how enterprise contracts were managed. Today we have over 500 employees across three continents - APAC, Americas and Europe - including engineers, data scientists, lawyers, product managers, etc.

How scalable is your solution? And what are your post-covid plans?

Sirion is a SaaS product built with best-in-class technologies to offer a highly scalable and robust enterprise-grade solution. Today, Sirion is used by over 200 of the world’s leading organizations such as Vodafone, BP, Credit Suisse, etc. to manage 3.5 million contracts across in 100+ countries. Over $300B in contract value is managed on Sirion across a network of 300,000 buyers and suppliers. Sirion is hosted on the industry-leading AWS cloud, and compliant to stringent security standards such as ISO 27001, SSAE 16 and ISAE 3402.

The scalability of our technology has served us well seamlessly supporting our rapid growth trajectory where we have been doubling our revenue YOY for the past 3 years and have seen a 4x customer growth in the past 18 months.

The Covid-19 pandemic is an unprecedented crisis that has caused significant disruption for most businesses. At the same time, it has exposed the weaknesses in supply chains like never before and amplified the urgency to fix these gaps to create better visibility and control for enterprises in their supplier and customer engagements. Sirion was built for precisely this purpose. As a result, the interest in our product has only increased of late.

That we were able to successfully close a $44m Series C funding round led by Tiger Global and Avatar Growth Capital in the middle of the pandemic (in May 2020), is a reflection of our uninterrupted momentum despite the challenging circumstances.

To keep this momentum going, we will continue to invest heavily to enhance our engineering capabilities, especially in AI. As part of this, we have recently established a new AI laboratory in Seattle in the US to accelerate our product roadmap. We have expanded our technology leadership with the recent appointments of our new Chief Technology Officer (Anu Engineer who joined us from Cloudera) and Chief Product Officer (Mahesh Unnikrishnan - joined us from Google) in Seattle.

Additionally, we have significantly ramped up our sales and marketing capabilities under the leadership of our new Chief Revenue Officer Amol Joshi who joined us recently from iValua.

How has the Contract Lifecycle Management Industry been affected due to Covid-19?

Almost every supply chain has been impacted by the Covid-19 crisis. As businesses navigate these uncertain times, the focus on keeping supply chains up and running has put a renewed emphasis on the efficient execution and management of enterprise engagements. I feel this is creating significant expansion opportunities for procurement technologies in general, and for the contract lifecycle management category in particular.

As explained in my previous response, we are seeing increased demand for Sirion and I attribute this to Sirion’s AI-powered capabilities across the complete contracting lifecycle enabling (a) quick analysis of legacy contracts to identify risks due to missing or deviating clauses (b) efficient creation of compliant contracts and (c) real-time monitoring of outcomes and value realization post-signature.

We are really bullish about our growth prospects. In fact, we launched SirionAE - our new AI-powered auto-extraction and contract analytics platform - just last week. SirionAE goes beyond the traditional metadata extraction to capture clauses, obligations, service levels and more

At 5X the speed and 50% of the cost of legacy solutions. SirionAE’s extraction engine has been calibrated to accurately extract and analyze clauses especially critical during this crisis such as Force Majeure, Data Protection and Confidentiality, Termination, Insurance Coverage, Business continuity, etc.

Contract management by the third party. Doesn't that bring legal implications?

Sirion is a technology platform that automates and simplifies the processes related to the creation, storage, analysis and ongoing monitoring of enterprise contracts. We don’t manage the contracts on behalf of our clients. Our clients remain in complete control over their contracts during the process and are responsible for managing the contracts and their supplier and customer relationships. Sirion enables robust data security through granular access control to ensure access to authorized users only.

The contract data is hosted on AWS with best-in-class data security infrastructure and global hosting options to ensure a compliant hosting solution as per the needs of each client.

Who are your consumers presently?

Our clients include 200+ of the world’s largest organizations across industry sectors including banking and finance, telecom, transportation, oil & gas, technology, government, healthcare, pharmaceutical, retail and consumer goods.  Some of our clients are Vodafone, BP, Credit Suisse, and Fujitsu.

Funding details

The company raised its Series A funding in 2014 of $4.7 Mn from Sequoia India. Then in 2016, the company raised Series B capital of $16.2 Mn from Sequoia India and Qualgro. Recently, in May 2020, the company raised Series C fund of $44Mn from Tiger Global and Avatar Growth Capital.