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Sapho Makes legacy software
Sapho gets $14M more to make legacy software more useful with ‘micro apps’
What you need to know
Sapho empowers employees with a modern portal experience that surfaces personalized and relevant tasks and data using micro apps. Sapho micro apps are built by IT on top of existing systems using pre-built templates and a drag-and-drop micro app builder. These micro apps – available on any device, intranet, or messenger – provide employees proactive notifications about interesting system data
Sapho Makes legacy software
Sapho Makes legacy software, Sapho, which has developed a platform that lets you build “micro apps” for older legacy software packages (often without any APIs at all) to make them more useful and used (“as easy as using Facebook” is the pitch from CEO and cofounder Fouad ElNaggar), has picked up $14 million in a Series B round of funding — raised as the startup continues to pick up speed among enterprises using older software, growing revenues 320 percent and customers 200 percent in 2016. Sapho Makes legacy software
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Sapho added a Microsoft Teams integration earlier this month, and it also added an integration with IBM Domino (the server side of the legacy service IBM Notes) this past February. It also integrates with software from Microsoft Dynamics, Oracle’s EBS, Salesforce and SAP ERP.
That momentum has also meant that Sapho has been attracting M&A attention: close sources tell us that both Microsoft and IBM are among a group who have talked to the startup about buying it outright as a route to offering micro apps building and administering services to enterprises direct, rather than letting a third party do it for them.
Sapho’s valuation is not being disclosed, but ElNaggar tells us that its increased nearly three-fold since its last round, a Series A of $9.5 million in June 2016, announced at the same time as Sapho launched out of closed beta. The company has raised $27 million to date and is not yet profitable, investing everything in growth at the moment, he added.
The rush of new cloud services from the likes of Amazon, Microsoft, Salesforce, Box and so many more has taken the IT industry by storm. Many small companies and some larger ones are jumping into the new wave of IT with both feet by buying into cloud-based products that can be used in the office, on the go on your phone and maybe even through your watch or Echo speaker. Sapho Makes legacy software
But that is not the whole story: there is a lot of legacy software still being used by large enterprises, and in many cases the cost of it has already been depreciated to zero, noted cofounder Peter Yared, making it a compelling concept for companies to figure out how to continue to use that rather than invest in something new.
“In Silicon Vally people love to talk about running Docker and Kubernetes, and that is the future of the enterprise stack maybe 15 years from now, but the reality today is that we’ve got security concerns and an IT team that is not ready to make that migration,” said ElNaggar.
“The cost required to migrate is so abhorrent and risky that if they can find a way to get more value out of systems tat have been depreciated to zero on balance sheet, if they have a way of triple productivity on an asset that is sitting with zero dollars on balance sheet, then that’s what they will do. Plus, there’s tens of billions in revenue still running on top of AS/400s.” (IBM’s legacy system, first introduced in 1988.)
Sapho may focus on ways to make legacy software more modern, but the product itself is a product very much of the new wave of IT applications and how they are priced on demand: it is $4 per active user per month, with a one-time connection fee “to connect the gnarly older stuff” in the words of Yared. Sapho micro apps are built by IT on top of existing systems using pre-built templates and a drag-and-drop micro app builder
“I have seen Sapho’s traction firsthand with Fortune 500 customers looking to modernize their existing systems and improve employee productivity,” said Raymond Tonsing, founder and MD of Caffeinated Capital, said in a statement. “As someone who is always on the lookout for transformational companies with exceptional founders and a world-class team, I believe Sapho is in the right spot to transform enterprise systems while also fundamentally improving how people work.”
Tonsing was the first angel investor in Sapho and also invests in Affirm, Docker, Color Genomics and many others. He also has an interesting track record of exits in developer-focused startups: he was also a backer of Parse (the developer platform sold to Facebook) and Appurify (an app testing platform sold to Google). Sapho Makes legacy software Sapho micro apps are built by IT on top of existing systems using pre-built templates and a drag-and-drop micro app builder
