SciQuest Acquires Spend Radar: Company and Customer Analysis (Spend Matters PRO)

Earlier today on Spend Matters PRO, we featured our first detailed analysis of SciQuest's announced acquisition of Spend Radar. We encourage Spend Matters readers to subscribe to PRO content to gain a level of insight into the deal and what it means for customers, partners, prospects, competitors and investors that may be missing elsewhere in the market.

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Here are some excerpts from our PRO coverage:

Spend Radar is the leading independent spend analysis provider in the market without a broader suite offering. In the early years of the business, the Spend Radar founders built the firm with a limited direct sales force and a largely channel-driven model, only recently changing to a hybrid channel/direct sales approach. In general, customer satisfaction was quite high and they won a substantial portion of the deals they competed in. Yet Spend Radar has been held back by its smaller size and limited global reach, including a sales and marketing organization that was a fraction of the size of many of their suite competitors.

In looking at the transaction from the acquirer/company perspective, our analysis suggests:

  • SciQuest paid a ... valuation, especially up-front, given Spend Radar's ... growth. The most likely reason is ...
  • With the acquisition of Spend Radar, SciQuest establishes itself as a value-buyer within the procurement market. They've become the Berkshire Hathaway of procurement solutions, if you will. With the acquisitions of AECsoft, Upside and now Spend Radar, SciQuest has built a consistent ...
  • SciQuest is rapidly closing product gaps in its portfolio relative to suite vendors such as Ariba (likely soon to be Ariba/SAP). In recent quarters, SciQuest has ... SciQuest could also accelerate penetration of the market by acquiring ...
  • SciQuest will further accelerate penetration outside its historic core vertical markets with this deal. This includes access to...
  • Spend Radar is not a pure SaaS model. No spend analysis-focused company is...
  • SciQuest will significantly benefit from Spend Radar's strong ...

In looking at the SciQuest/Spend Radar transaction from a customer perspective, our initial analysis suggests:

  • Spend Radar customers should pay close attention to contract language ...
  • Spend Radar customers should familiarize themselves with alternatives ...
  • Spend Radar customers should attempt to understand how long their current support teams will be in place ...
  • Spend Radar customers should consider what SciQuest has to offer in other areas including P2P, contract management and supplier management. While a bit of a hodge-podge of platforms at the moment ... SciQuest's combination of assets is unique and highly valuable...

...and we've obviously left you hanging, hopefully wanting more. Quoting Spend Matters UK/Europe editor Peter Smith, "Spend Matters PRO is where we publish material that we think has serious value to readers – not just a quick opinion, or overview, but an in-depth piece for which we've typically done really serious research, thinking and/or analysis." Give it a try.

- Jason Busch

Voices (4)

  1. Jason Busch:

    Thanks, Joy. That is a fair point. But I think it is important for people to realize that spend analysis is delivered as a solution 90% of the time … the software matters. But the team delivering the services onto matter as much as well … you guys built your reputation on solution delivery (get the data fast, turn it around, beat the competition in quality, accuracy, speed, turn it back around). I don’t honestly think your customers cared about SaaS or no SaaS. It was the outcomes they got. I think less than 15% of the spend analysis market just wants the tools (at least by our seat of pants calculation today).

  2. Joy McCaffrey:

    Hi Jason, The point that I’m clarifying is stated above. You state above that "Spend Radar is not a pure SaaS model. No spend analysis-focused company is…" The clarification I was making, which you modified, is pointing out that the Spend Radar technology solution is in fact a pure SaaS model. I was also pointing out that you do in fact provide more information on your Pro site stating that "spend analysis requires more than just technology."

  3. Jason Busch:

    Joy, I have modified your comment because it pertains to something which is not in the public domain (it is on PRO). Please have SciQuest (or someone with a PRO seat) post it directly on the PRO site. We accept comments 🙂

  4. Joy McCaffrey:

    Hi Jason, thank you for your coverage of the SciQuest/Spend Radar acquisition! We are very excited about it. You correctly point out in your Pro article that spend analysis requires more than just technology. However, I wanted to make one clarification regarding your comment here …

    Editors note: (PRO SUBSCRIBERS CAN SEE the rest of this COMMENT ON THE SPEND MATTERS PRO site)

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