Selectica IPO’d in March 2000 at the peak of the dot com boom and reached a market cap valuation of $5 billion and was sold 8 years later for $50M.
Selectica provided configuration software, a subcategory of quote-to-cash, which is a sub-category within the broader CRM.
In the early 2000s, as the Internet became mainstream, businesses discovered online b2b as a new procurement channel and rushed to deliver their products and services for purchase online, via their website.
Businesses such as Cisco and DELL, had products that required configuration by the buyer to customize for their needs. Some of these products (e.g. configuring a large server) had many options across the bill of materials that customers could pick and choose, and therefore a class of software that could manage the logic of providing only valid options at each stage of the configuration, came in particularly helpful. Selectica aimed to provide this software.
However, there wasn’t really a market large enough for a standalone company to thrive and grow in this category. The majority of the b2b businesses, did not need a configuration software solution. Their products and services were relatively straightforward and did require complex configuration, and simple rules that could be easily programmed were sufficient. For the niche segment of the market that had a complex set of products and services to sell (the likes of Cisco), were too complex, and only custom logic built from the ground up specific to their use case could solve their problem.
Quarterly revenue capped at about $12MM range, 70%-80% of which was attributed to professional services.
