Indio and Applied Systems Tie the Knot

Nine months ago, we announced our Series B investment in Indio. The Series B came to represent somewhat of a defining moment for Menlo since it marked the first time we shared our thesis around “trifecta” SaaS businesses publicly. While Indio was not the first trifecta company to land in the Menlo portfolio, its digital-first approach to insurance innovation presented a unique opportunity that helped crystalize our thinking about the mental model.

You can revisit the original post about insurtech and our SaaS thesis, but the quick refresher is that trifecta SaaS companies:

• Find initial velocity via a wedge (usually solving a busted workflow—often a small perceived TAM).
• Leverage the workflow to become a data plane (in other words, a system of record).
• Expand TAM by connecting counterparties to the data plane (network).

Trifectas are sticky, steadily building book value. They grow efficiently and their cloud-native data planes give them intimidating lateral capabilities. At Menlo, we have always believed that what has driven us to invest in trifectas will ultimately lead to acquirer interest. Perhaps what we underestimated—especially with regards to Indio—is how fast, and how persistently, M&A interest would come on.

Today, we proudly announce that Indio has entered into a definitive agreement to be acquired by Applied Systems, the largest global provider of insurance software. Applied is a fantastic business—sticky, dominant, well run. It’s also the leading incumbent in the space that Indio was ultimately looking to disrupt. Mike, Adam, and the Indio team not only will fit in well, but they’ll provide product innovation leadership to supercharge Applied’s growth and product ambitions. It’s a logical combination of forces and a very satisfactory outcome for all parties involved.

Congrats to all!