Rearden Commerce (See recent coverage here, here, here, and here) just announced that it is acquiring Ketera. For those who don't know Rearden, the company has long focused on positioning itself as a personal services (e.g., air, car rental, hotel, dining, small parcel/overnight, etc.) procurement and business/personal life-simplifying complement to traditional P2P providers. Rearden has also gotten into the expense management space as well, with a core acquisition that enabled it to compete against the likes of Concur and others. Overall, Rearden's strategy has been razor focused up until now on delivering the combination of a web-services platform (which has an elegant means of incorporating third-party sites, content and capabilities without punching out to other URLs) and targeted functional capability.With the acquisition of Ketera, it seems as though this targeted strategy is changing entirely.
Ketera has a suite of source-to-pay capabilities competing more broadly against Ariba, SAP, Oracle, Coupa, etc. It also has spend visibility/spend analysis tools that compete against a range of other providers including BravoSolution, Emptoris, Iasta, Spend Radar, Zycus and many others. In the acquisition announcement, Rearden notes that "The Ketera Network streamlines the entire source-to-pay process with capabilities that include sourcing, contract management, procurement, invoicing and spend analytics. In addition, its public marketplace, supplier discovery and marketing tools are designed to help sellers grow their business."
Ketera has a long history, going back a decade, to the dot com B2B era. Before becoming "Ketera," they were known as Marketmile. Flash forward many years, however, and Ketera has still failed to stick with the leaders from an adoption standpoint in the dash around the track. In recent quarters, despite a significant reinvestment and rebrand based on a new network-based strategy and platform, Spend Matters has not seen Ketera frequently in P2P/network deals compared to their competitors. However, the company has held its own in the spend analysis market competing in select deals, according to our sources.
Together, the joined companies will have approximately 450 employees (Rearden currently has approximately 325; Ketera, 125). Spend Matters recently spoke with Patrick Grady, Rearden's CEO, who shared that while he believes the two companies compete in similar if not overlapping spaces, "the functionality of the Rearden platform and Ketera network are highly compatible." Patrick added that the two companies have almost been on "parallel missions" in their respective markets. Both "delivery models, technology assets, and platforms" have taken similar approaches and have largely sold to the "same economic buyer" with a similar value proposition. Incidentally, they also share an investor, in the form of Foundation Capital.
How will Ketera complement Rearden? Patrick suggests that Rearden "set out to build a platform in the B2B [market] based on web services that was content agnostic ... the idea was to build a platform capable of enabling and on-boarding all commerce." Rearden never planned to limit itself to simply being the "Amazon of services." Ultimately, they wanted to construct a truly unique platform that wasn't disconnected from the functional applications -- which could become increasingly broader in scope and spend coverage overtime. Travel was a logical first choice for category enablement, but today the platform and business model is "inherently horizontal".
From a go-to-market perspective, Rearden has focused primarily on developing strong channel relationships (and has recently invested in ramping up direct sales capabilities as well). Without question, Spend Matters believes that a significant rationale for the deal was to enable Ketera to gain access to Rearden's distribution and channel network. But will it be possible to sell broader P2P enablement and capabilities in the same manner that Rearden has been able to deliver its personal services concierge capabilities via partners in recent years? It's a logical bet, but one that has not yet been proven in the market. When Ketera last worked with American Express, for example, the channel business model never got the wind behind the spend sails that it expected.
Stay tuned for further coverage and analysis of the Rearden/Ketera deal and what it means for the market later today.