Not every vendor on the Spend Matters 50/50 list is one we think is a ubiquitous and “must-use” provider. One in particular interests us for their business model and investor enthusiasm as much as their reach of solution differentiation. And this provider is, of course, Blur Group, a provider that has had a dizzying ride on the London small cap AIM exchange and has fed investor interest with press releases which remind us more of 2000 than 2014 (see links to related coverage at the end of this post).
As we’ve noted previously, Blur focuses on matching buyers and suppliers in specific markets, especially in the marketing services area, through a target costing approach. They then take 20 percent (not a misprint) of the value of the awarded RFP, which is paid for by the supplier. Here’s some more context to quote from previous Spend Matters coverage:
“[Blur] provides somewhat of an intriguing spin on services procurement. They work on a project basis managing sourcing events, taking 20 percent of spend (not a misprint) to serve as a market maker for a variety of services including design, marketing (e.g., agency, print), content, art, technology, and legal. To date, blur has sourced nearly $70 million in spend across 2,925 projects – a number that is cleverly advertised and updated, along with recent projects and the size of its supplier network, on the Blur site … The company is a classic marketplace, serving as an intermediary between buyers and suppliers, and in this case, providing some degree of guarantee as to the effectiveness of a given supplier to perform. In other words, those who get the business are vetted, and Blur provides some type of indemnification in the event of a failure to perform or other misstep.”
While we think that Blur’s investor centric marketing and pumping of the stock through press releases on marketplace RFP activity is more humorous than pragmatic, there are aspects of the business model – including marketing directly to the business rather than procurement, as well as the broader “intermediary” role the provider assumes – that are intriguing. But first Blur must prove the business model and value proposition can scale. We’ll watch closely as this marketplace curiosity pushes ahead, as Blur has clearly earned a place on the 2014 Spend Matters 50/50 “Ones to Watch” list, albeit for different reasons than the others.