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This week’s Startup feature is lumos.com. Lumos is a leading SaaS Management and Identity Governance Software provider helping enterprises manage their software spending, reduce their number of IT tickets, and manage access to employee applications.

Company & Team Introduction

Lumos is the SaaS management and IGA solution to help companies with various issues, including budget optimization, workflow streamlining, addressing duplicate underused SaaS applications/users, and vendor/contract management. The idea for Lumos came in early 2020 after two curious Stanford students, Andrej Safundzic and Leo Mehr, were inspired by a computer science lecture about how difficult it is to control your digital identity. Their professor asked how many online accounts have you created in your life: 10, 50, 100? The vast majority of people in the world wouldn’t have a clue. This idea led them to reach out to Alan Flores-Lopez, a friend who at the time was doing security work for a leading IOT company, Samsara, to see if he had any ideas to build from this online identity problem. After talking to Alan, the group identified that there is unified authentication with platforms such as Okta but no unified platform for authorization. If individuals struggle to manage their online identities, imagine the complexity at a 1000-employee company. The founding team is experienced with Andrej previously co-founding German-based startup DigitalService4Germany, which was the private technology fellowship of Germany under the supervision of the Federal Chief of Staff before being taken over by the German Government as a part of the German Chancellery. Alan is an experienced engineer who has worked in the past with leading IOT company Samsara and cryptocurrency startup Cambrian Tech. Mehr previously interned as a software engineer at Google before helping build algorithms at Hudson River Trading. The company is based in Palo Alto, California and has quickly scaled their team to ~80 employees.

Product Overview

Lumos is a leading SaaS management and IGA software provider serving some of the world's largest enterprises. The company has built an easy-to-use suite of products to help companies reduce their ever-growing software spend while driving massive efficiency gains for IT teams via ticketing/access automation. The SaaS management solution helps companies reduce their software spend by identifying all inactive licences and surfaces them to weed out at renewal time quickly; it also helps remove redundant apps with overlapping features/modules costing the company money; Lumos helps detect and act on application redundancy. Lumos also helps companies negotiate better software pricing by giving visibility into usage and license metrics in addition to an automated renewal calculator. Their IGA solution provides further cost savings by automating manual tickets, minimizing the possibility of errors, inefficiencies, delays, and repetitive tasks that take time away from the 1,000 other things that bog down IT teams. Lumos also helps accelerate tedious access reviews that lead to compliance backlogs and vulnerabilities by auto-populating lists and automating key actions.

Total Addressable Market

The total addressable market for SaaS management software is already significant and is expected to undergo blistering growth as SaaS sprawl continues to rise. In 2020, the market was estimated to be just under ~114B, presenting an already enormous opportunity. Not only is Lumos tackling a massive issue for enterprises, but it is also high growth. The market is anticipated to grow to a staggering ~760B by 2028, thanks to an impressive 27.5% CAGR.

Business Model & The Numbers

Lumos doesn’t offer a self-service model, as the company’s product requires a more sales-focused, hands-on approach to selling to the massive enterprises the company targets to ensure an optimal product experience. The top-down high-touch sales motion allows Lumos to be certain the companies they serve, such as GitHub and MongoDB, have a proper understanding of the product and its features, make sure the onboarding process runs smoothly, and provide additional support the company may need, such as custom integrations, features, etc. Lumos has an “impact calculator” that shows how much a 1000-person company can save, on average, $647K per year with their SaaS management and IGA product.

Traction

Lumos has seen solid early adoption from an impressive list of companies from a wide range of different verticals, powering IT/security teams ranging from some of the largest and most innovative software companies in the world, including GitHub, MongoDB, Deel, to major sports leagues like the MLB, to EV charging company ChargePoint. Customers are seeing incredible results using Lumos; for example, online EdTech company Chegg, with 2000+ employees, reduced all IT tickets by 25% and reduced time-to-resolution by an astounding 99%. Another client of Lumos, Checkr, reduced their SaaS spending by $230k while also automating IT tickets by 20%.

Competitors

Any massive, high-growth market opportunity will have fierce competition, and the SaaS management market is no different. Here are some of the other major players in the SaaS management space:

Torii — Founded in 2017 by Tal Bereznitskey, Uri Haramati, and Uri Nativ, Torii is a SaaS spend management platform that helps companies discover all the apps they are using, cut SaaS spending, and automate IT tasks. The company does offer a self-service “basic” tier for $2.5/user/month for companies with 100+ employees, and pricing for their “professional” and “enterprise” tiers is based on a custom quote. Torii has an impressive list of customers, including Palo Alto Networks, Fiverr, and Productboard. Torii most recently raised a $50M Series B led by Tiger Global with participation from follow-on investors such as Uncork Ventures, Wing Venture Capital, Entree Capital, Global Founders Capital, and Scopus Ventures. In 2023, the company announced in an interview that it was at $12M in revenue. Six months into 2023, it was laying 30% of its workforce. Torii is headquartered in New York City, New York and has a team of 67 employees post layoffs.

BetterCloud — Founded in 2011 by David Politis and David Hardwick, BetterCloud offers a SaaS management platform that provides features such as tracking applications and expenses, automating user access and permission, and securing cloud files. According to an interview with the founder, BetterCloud hit $56M in revenue and serves a customer base of over 2.5k. BetterCloud has raised a total of $186M across its funding rounds, raising from top Venture Firms, including Accel and Bain Capital Ventures. Vista Equity Partners acquired a majority stake in BetterCloud in 2022 for an undisclosed amount. BetterCloud is headquartered in New York City, New York, and has grown its team to over 275 employees.

Funding

Lumos emerged from stealth less than a year ago, announcing the company had raised a total of 30M in funding from an elite group of VCs and angel investors. Participants in the round include Peter Levine from Andreessen Horowitz, Neo, Gaingels, and Harpoon VC, in addition to exceptional angel investors such as Greg Brockman (CTO, OpenAI), Phil Venables (CISO, Google Cloud Platform), Lachy Groom (GP, LGF), and Christina Cordova (COO, Linear).

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