While companies are experimenting with services like ChatGPT, which helps employees write notes and answer questions, one of the clearest signs of just how pervasive AI really is in the world of enterprise IT is how frequently it's being used for the more mundane applications that organizations use. Today, a startup that embodies this principle is announcing funding, highlighting the pace of enterprise AI adoption.
Opkey built an AI platform that helps organizations continuously test their finance, HR, and other enterprise resource planning (ERP) software, and has now raised $47 million in Series B on the back of a strong customer base that includes more than 200 large enterprise clients and partnerships with systems integrators like KMPG and PwC.
PeakSpan Capital led the round, with participation from previous backers and current investors including UST Global, Verica, Vertical and India's YouNest. The Series B marks a major step forward for Dublin, Calif.-based Opkey, which had previously raised only $12 million. The valuation was not disclosed.
Opkey's platform may not be the most visible part of an enterprise IT stack, but it fills a gap in the market that's critical to how businesses operate.
Cloud architecture and SaaS have become the foundation for how all new business services are built, but they also have a large foothold in many legacy organizations that are going through a digital transformation process. They are faster, cheaper to use, and easier to deploy to your user base, but they also come with many problems, such as vulnerabilities and inconsistencies between software that can take down an entire network. This is where Opkey comes in.
CEO Pankaj Goel co-founded the company with his childhood friends Avinash Tiwari and Lalit Jain. All three are ERP industry veterans who have worked for big companies like Adobe and Oracle, where they not only gained experience in software testing but also saw the dire consequences when it's not done correctly. ERP systems are not typically siloed; they work in conjunction with each other, so if one system conflicts with the others or doesn't work properly, it can bring down the entire ERP stack.
“Cloud applications are continually updated, which is not the case with traditional software,” Goel said in an interview. “This functionality breaks existing functionality.” Typically, he estimates, an organization might consolidate seven or eight ERP systems. “Any change in the ecosystem means you have to retest, which means companies are in testing hell.”
Testing and data hell are actually classic use cases that AI-based automation is meant to solve, and cybersecurity and DevOps software companies are starting to realize this too. In Opkey's case with ERP, they continuously track areas like integrations, updates, upgrades, and what they call “user acceptance” (how well end users are interacting with new features they should be using). Packages and platforms that Opkey currently covers include Oracle, Workday, Coupa, Veeva, Salesforce, SAP, Microsoft Dynamics, UKG, Trackwise, and more.
Sanket Merchant, a partner at PeakSpan who led the investment, believes that given trends in IT, enterprise interest in a service like Opkey will be strong (though the question is whether it will be enough to stave off competition from others in the space, such as Leapwork and Katalon, and equally as likely that the big ERP companies will want to take on the business themselves).
“For businesses, the biggest IT spend is related to critical enterprise apps, or ERP apps,” he said, citing that small businesses as well as large multinationals spend roughly $73 billion annually on ERP software, including billing, accounting, human capital management and software deployment. These companies may have as many as 52 different apps that rely on ERP integrations to work. “Automated testing is critical to ensure that investment and that it works as intended. A failed SAP deployment or Workday migration can have a huge impact on a company's revenue and brand.”