Sequoia invests $12.2m in managing outsourced technology

Photo credit: tec_estromberg.

When a company wants to add new technology but doesn’t have the time or money to create it in-house, it passes the responsibility over to another company. This strategy is known as BPO – business processing outsourcing – or ITO – information technology outsourcing.

There are plenty of businesses that offer relevant technology services, but they can be a lot of work to manage once a contract has been signed.

That difficulty is an issue that’s worth a lot of money, Ajay Agrawal explains. His solution is SirionLabs, a software-as-a-service (SaaS) startup.

It focuses on making sure the technology services a company has bought – known as “procurement technology” – perform transparently and at their full potential.

Here’s an example: one of Sirion’s clients is oil and gas company British Petroleum. If BP decides to outsource a technology requirement to Accenture, Sirion will manage what happens afterwards.

“We act as a layer between you and your large service provider,” Ajay says. “Sirion will monitor whether they’ve delivered, what they’re supposed to be doing, and if they’re complying with the contract. We’ll provide a picture of what was supposed to happen and use big data to tap into performance.”

It’s a big opportunity. The startup today announced that it’s raised fresh money in the form of a series B round of US$12.25 million from Sequoia Capital. Sanish Mondkar, the former executive vice president and chief product officer of SAP Technologies, will be joining its board, where Sequoia India’s managing director, Shailendra Singh, already sits.

The money will be used to develop the product further, from improving the way it processes language to increasing its automation expertise.

Time for SaaS

Aside from a few large service providers, most of Sirion’s customers are in the US. In the 19 months that it has been on the market, it’s onboarded 20 enterprise customers, including Mastercard and Vodafone.

Ajay describes the startup’s narrative – it’s one that’s off the beaten path.

The research and development for Sirion was launched in November 2010. Meanwhile, Ajay was working on exiting his other startup, UnitedLex. In 2011, his stake was acquired by Helion Venture Partners, Canaan Partners, and Sequoia Capital for US$17 million. Ajay spent the next year researching at Stanford.

Photo credit: Stock Monkeys.