US-based software testing solution provider Opkey, which runs an AI platform that enables finance firms to test finance, HR and other resource planning software within its digital ecosystems, has received a capital injection.
The fast-growing firm said, on the back of customer traction from around 200 enterprise customers, including professional services giants KMPG and PwC, it has secured $47 million in fresh funds.
The raise was led by PeakSpan Capital, with new allocations coming from a range of existing investors UST Global, Verica, Vertical and India’s YouNest.
The capital injection is seen as a big step up for Dublin, California-based Opkey, which is seen as somewhat of a rising star within North America’s QA space. Prior to this latest funding round, the company had raised $12 million.
“Opkey’s platform may not be at the most visible end of the enterprise IT stack, but it’s addressing a gap in the market that is critical to how enterprises operate,” stressed Pankaj Goel, the company’s CEO.
Goel, who co-founded the company with his childhood friends Avinash Tiwari and Lalit Jain, called cloud architecture and SaaS “at the bedrock of how all new business services are built, but they have also found a lot of footing with more legacy organizations undergoing digital transformation processes.”
They can be faster and cheaper to use and easier to deploy to a user base, but they can also come with a ton of problems, including the fact that any vulnerabilities or inconsistencies between software can take down entire networks.
“This is where Opkey comes into the picture,” Goel continued.
Goel declined to slap a valuation on the firm but did go on to stress that, as companies are experimenting with services like ChatGPT to help workers write memos, answer questions, and much more, yet one of the clearest signs of how much traction AI is really getting in the world of enterprise IT is how often it figures in the more routine applications that organisations use and test.
“Our startup exemplifies that axiom so our [fresh] funding is underscoring that pace of enterprise AI adoption,” he noted.
‘Front-row seat’
Goel, Tiwari and Jain are all three ERP industry veterans with experience at big companies like Adobe and Oracle.
Goel stressed that their time there gave them experience in software testing, and it also gave “us a front-row seat” to how disastrous it could be if not done correctly.
“ERP systems typically do not exist in siloes: they integrate with each other to work, which means if one conflicts with another, or is not working correctly, the whole ERP stack can crash,” he noted.
Moreover, “cloud applications are continuously giving updates, which was not the case with traditional software,” Goel added.
“That functionality breaks existing functionality.” He estimates that typically an organisation might integrate seven or eight ERP systems together.
“Any change in the ecosystem and you need to test again. It means enterprises are in testing hell.”
– Pankaj Goel
“Testing and data hell” are in fact classic use cases for AI-based automation to resolve, something that cybersecurity and DevOps software companies have also come to realise, Goel continued.
In the case of Opkey and ERP, it is continuously tracking areas like integrations, updates, upgrades and something they describe as “user acceptance”, he added, pointing out that this involves how well end users are interacting with new features they are supposed to be using.
Packages and platforms that Opkey currently covers include Oracle, Workday, Coupa, Veeva, Salesforce, SAP, Microsoft Dynamics, UKG and Trackwise.
Market growth
Sanket Merchant, the partner at PeakSpan Capital, who led the capital raise, explained his firm’s decision to bring fresh funds together for Opkey.
Firstly, he is convinced there will continue to be a very strong funnel of business interest for services like Opkey’s given the way IT is moving.
“For businesses, the most expensive IT spend is related to critical enterprise apps, their ERP apps,” he said, citing figures that say that some $73 billion is spent on ERP software for billing, accounting, people management, software deployment and more annually across both smaller businesses but especially massive, multinational organizations.
These in turn can have dozens of other apps that rely on ERP integrations to work.
“Automated testing is important to drive assurance around that investment, to make sure it behaves as intended. A failed SAP deployment or Workday migration can have a huge impact a business’s revenue, and its brand,” Merchant said.
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