SAP Ventures Backs Lavante: Despite Hiccups, the Supplier Management Gets a Vote of Support (Part 2)

Last week, Lavante raised a new $8 million funding round in an effort led by SAP Ventures (as background on Lavante and the funding round, please read our initial coverage of the news). We think the SAP Ventures connection is intriguing, given the fact that the ERP giant already sells technology directly in this area (SAP sells a supplier management module as a separate component of its Sourcing product, leveraging an updated version of the original Frictionless architecture and code base). However, to the best of our knowledge, SAP has not leveraged its Sourcing/Supplier Management product or any other to pursue the audit recovery market. Regardless, it will be interesting to observe whether or not the SAP investment will lead to closer commercial ties between the organizations.

We reached out to Lavante's President and CEO Joe Flynn last week to learn more about the direction they plan to take based on their new funding round and SAP Ventures relationship. We first asked Joe what he saw were the largest potential new/expanded areas of R&D investment for Lavante given the funding round. His response was that "Lavante focuses on on-demand supplier management solutions that provide quick time to value, drive supplier participation and are self-funding. We are going to invest aggressively in additional capabilities across our integrated recovery auditing and supplier information management solutions, while continuing to drive adoption of the Lavante Supplier Network."

I was also curious if Lavante plans to continue the same go-to-market approaches of the past, often leading with audit recovery, or whether it plans to take an approach that places equal priority on the supplier management lead-in angle. Joe suggests, "Lavante's approach to the supplier management market spans both supplier information and supplier AR reconciliation processes. With a single platform for both recovery auditing and supplier management, Lavante offers the market an integrated, self-funding combination, as well as individual solutions. We see a tremendous need in the market for quality supplier data, compliance with regulations (including the new 1099 tax regulation), and automation of the supplier AR reconciliation process."

The last question I asked Joe was whether or not he saw the supplier management market as a stand-alone segment or not (a question on many people's minds at the moment, including companies evaluating smaller providers in the sector). Here, Joe suggested "We see a massive need in the market for quality, comprehensive supplier data. ERP, Finance and Supplier applications are reliant on this data, but don't ensure the ongoing quality ... supplier management solutions are a perfect complement to these applications and our unique communication process drives the supplier outreach, compliance and adoption."

Stay tuned as we continue to look at the evolution of the supplier management space in the New Year.

In the meantime, if you're curious to learn more about the area, we encourage you to download our free research briefs on the topic:

Leveraging Supplier Management Platforms for Multiple Goals: Risk Reduction, Supplier Diversity and CSR

Supply Risk Management -- Segmenting the Technology and Content Landscape and Choosing the Right Category of Solutions

Supply Risk Management and Supplier Performance Management -- Managing Your Supply Base in Real Time

Jason Busch

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