Market Intelligence Content

20 Tips to Maximize Private Equity, Investment and Strategic Buyer Outcomes (Part 1: Preparing Wisely) [PRO]

In recent years, we’ve spent thousands of hours working with private equity groups, CEOs and boards to evaluate acquisition targets — and with sellers to optimize exit scenarios and outcomes in the procurement solution market. In each M&A advisory or SolutionMap due diligence benchmark engagement, there has not been a single study in which we have not learned something new as a team. While from a seller perspective specific tactics can change over time based on conditions in the capital markets, the overall economy and other externalities (e.g., the current “dry powder” excess), there are well over 20 universal tips that we’ve identified that can apply in nearly all scenarios.*

So we decided to write this Spend Matters Nexus brief to share our top 20 lessons learned from the perspective of sellers’ to maximize their private equity, investment and strategic buyer outcomes (based on working “the other side” of the transaction). Today, we start with an initial five tips to prepare wisely (ideally) before a process begins. In the second installment, we’ll continue to share the next five tips for preparing wisely as the actual process approaches (i.e., “pre-process” tips). Then in Parts 3 and 4, we will jump to the actual deal process itself, offering tips for stewarding the effort and driving to an optimal outcome.

Jason Busch serves as Managing Director of Spend Matters Nexus, a membership, research and advisory organization serving technology acquirers (private equity, corporate development, etc.) and CEOs in the procurement and finance solutions marketplace (including contract management, B2B marketplaces/connectivity, indirect procurement, services procurement, direct procurement, commodity management, payment, trade financing, GRC/third-party management and related adjacent sectors).

Large Companies Lack Cash to Fund Their Supply Chains

procurement

David Gustin is the chief strategy officer for The Interface Financial Group responsible for digital supply chain finance and is a contributing author to Trade Financing Matters.

The popular opinion has been that many large American companies are flush with cash. In fact, surveys from some reputable institutions support this view. The AFP’s corporate cash survey found during the second quarter of 2019, U.S. businesses continued to build their cash and short-term investment holdings. This is intuitively supported by events like the corporate tax cut last year.

But this narrative is highly misleading.

Scout RFP’s customer reviews are in the new SolutionMap Customer Insights report

This week’s SolutionMap Customer Insights report focuses on customer reviews for Scout RFP, a sourcing and supplier engagement platform. Its applicable SolutionMap category for this report is in Sourcing. SolutionMap Insider members can click the story to read about Scout RFP in our latest report.

In each Customer Insights report, we provide a one-page summary from the SolutionMap peer review process. The page includes ratings on how well the vendor meets user expectations, three key differentiators for the vendor and a list of quotes about the vendor’s greatest strengths.

Coupa’s 3 Special Forces Teams (Part 2: Alliances + Business Development) [PRO]

Some of the secrets of Coupa’s continued growth even as it maintains the “Rule of 40” well into the hundreds of millions of dollars of annual revenue — largely through organic development but also through the sale of additional capabilities gained via acquisition — are three quiet teams operating in the shadows behind the product/solution, R&D and sales functions.

It uses these areas to great effect to collectively win individual battles against competitors. These teams are effectively “special forces” groups that have leverage far beyond their individual ability to contribute alone (but would not be successful without the broader Coupa arsenal that they’re supporting). Other vendors may have one of these weapons individually. Or on paper. But collectively Coupa is the only one that combines them to great effect as it moves its chess pieces around the tactical and strategic board.

This Spend Matters PRO brief provides a unique take on these groups from the perspective of a long-time industry insider who has seen them put to use effectively from a rare vantage point. Today we continue our look by exploring the second of Coupa’s special forces teams —  alliances/business development. (Click here for our analysis of Coupa’s corporate development function.)

Our analysis today begins by defining what alliances/business development functions do (and not do) for enterprise software / SaaS / cloud companies. Then we provide the details behind Coupa’s partner programs (including types, tiers, named partners, etc.). And finally we explore how Coupa leverages this area in ways that disproportionately benefit its broader operations.

Jason Busch serves as Managing Director of Spend Matters Nexus, a membership, research and advisory organization serving technology acquirers (private equity, corporate development, etc.) and CEOs. The views expressed in this research brief are his and do not necessarily reflect that of the Spend Matters analyst team.

Research note: This brief is based on extensive primary research. Beyond already available public information, no data or insights were provided by Coupa. However, a fact-check was provided to Coupa for informational purposes to ensure accuracy.

2019 M&A and Investment Dynamics For Procurement Technology and Solutions: Segmenting the Market (Part 2) [PRO]

By Spend Matters’ count, there are hundreds of cloud technology providers in the procurement technology sector, and well over a thousand if you count providers with a solution orientation (which may include market/category intelligence, consulting, advisory and related capabilities). Investor and M&A interest across this landscape of providers — from both strategic and financial buyers — is at an all-time high.

We define procurement solutions as technologies and services that target a range of areas that include:

— Core procurement (i.e., source-to-pay, procure-to-pay, etc.)
— Direct procurement
— Services procurement
— Contract management (that goes beyond supplier contracts)
— Accounts payable
— Trade financing (B2B Fintech)
— B2B (transactional connectivity, marketplaces, aggregation and GPO models)
— Third-party (supplier) management, from a GRC standpoint as much as from a procurement standpoint

In the first installment of the series, we introduced the first five groups of providers attracting the most investor and buyout attention: procurement technology suites, transaction-focused solutions, payment/financing providers, nimble solutions and leveraged buying/GPO models.

Today, we continue our focus on the “who” — exploring the final five groups of providers, including sharing illustrative providers in each segment and why buyers are attracted to each group. The five groups are:

— data/analytics/market intelligence solutions
— services procurement providers
— contract management and analytics vendors
— supplier management (and contractor management) providers
— “finance first” or “fi-pro” procurement solutions

Series Abstract: This multi-part Spend Matters PRO research brief explores the “who” (i.e., what types of companies are attracting the most interest and the profile of different buyers), the “why” (i.e., typical investment theses) and the “how” (i.e., the mechanics of deal processes and what is unique to the solution area, including where buyers that are new to the sector often have a higher learning curve than expected). It also explores some important dynamics in the market that have changed in recent months as buyer interest from both the strategic and financial sides increases.

SirionLabs’ customer reviews are in the new SolutionMap Customer Insights report

This week’s SolutionMap Customer Insights report focuses on customer reviews for SirionLabs, a specialist in contracts. Its applicable SolutionMap categories for this report are in Contract Lifecycle Management (CLM) and Contract Services/SOW.

SolutionMap Insider members can click here to read about SirionLabs in our latest report. In each Customer Insights report, we provide a one-page summary of feedback that includes ratings on how well the vendor meets user expectations, three key differentiators for the vendor and a list of quotes about the vendor’s greatest strengths.

Post-IPO Perspective on Fiverr — What Lies Ahead? [PRO]

About two weeks ago, Fiverr — the online freelancer marketplace — priced its IPO at $21 per share. The first full day of trading opened at $26, and the share price had risen to $44 before closing out the day at $39.90 per share. That day, the media outlet Marketwatch brandished the headline “Fiverr breaks from gig-economy IPO curse, CEO says market ‘is like e-commerce 20 years ago.’ ”

Heady times, indeed.

As for the gig-economy IPO curse (a reference to the subpar IPOs of Lyft and Uber), so far so good. This week, Fiverr was priced at about $28 per share, two dollars more than the opening price of $26 and seven dollars above the original IPO price of $21.

As for the second assertion that Fiverr is addressing a market that is “like e-commerce 20 years ago,” we’ll have to wait and see (until 20 years from now, to be precise). But it is an interesting contention, and not the first time it has been discussed. About seven years ago, when I started the Online Staffing & Human Cloud/Cloud Labor LinkedIn Group, I asked: “Can we have an iTunes or Amazon of work and labor services?” At this point though, while we’re still waiting to see, Fiverr may be the closest thing like it today.

In Spend Matters’ earlier PRO series, “Fiverr, Online Services Marketplace, Is Going Public: What You Need to Know (Part 1 and Part 2), we looked at Fiverr in terms of its rise as a marketplace business, its unique go-to-market approach, to-date financials, and we offered a high-level comparison of Fiverr and the two other publicly traded freelancer marketplace companies.

In this PRO brief, an addendum to the previous series, we focus not so much on Fiverr’s specifics today. Rather, we ask the question “Where to from here?” We offer a situation analysis and strategy assessment based on our own industry/market perspective, our own research of Fiverr (which began several years ago). We wrap it all up with some comments addressed to services procurement practitioners.

Tradeshift’s customer reviews are in the new SolutionMap Customer Insights report

This week’s SolutionMap Customer Insights report focuses on customer reviews of Tradeshift, which is known for its marketplace service, global invoice processing, payment capabilities and financing support. Tradeshift’s applicable SolutionMap categories for this report are in E-Procurement, Invoice-to-Pay and Procure-to-Pay.

7 Steps to Better Government Market Research

Doing better government market research is the latest topic from Public Spend Forum that we’ll address in Spend Matters’ weekly look at public sector procurement. PSF, a sister site of ours, has published articles addressing four of the seven steps for better government market research. It also offers free tools and templates that you can use to improve your market and supplier research outcomes. Let’s look at the full list and then delve into the details on the first four steps.

Fiverr IPO launches at $21, and share price nearly doubles

procurement

Fiverr (NYSE: FVRR), the online marketplace for digital creative services, priced its 5.3 million IPO shares Wednesday night at $21 per, raising about $111 million in new funding. On Thursday morning, shares began trading at $26, but when the market closed in the afternoon, Fiverr’s share price had risen to $39.96 (nearly doubling). Based on the closing price per share and an estimated 31 million shares outstanding, Fiverr’s market cap would be about $1.2 billion, or 16 times revenue.

We will provide further analytic post-IPO coverage soon. In the meantime, check out our recent PRO series: Fiverr, the Online Services Marketplace, Is Going Public: What You Need to Know — Part 1 and Part 2.

Zycus’ customer reviews are in the new SolutionMap Customer Insights report

This week’s vendor spotlight in the SolutionMap Customer Insights report focuses on customer reviews of the source-to-pay suite provider Zycus, whose applicable SolutionMap categories for this report are in Source-to-Pay, Procure-to-Pay and Strategic Procurement Technologies.

SolutionMap Insider members can click here to read about Zycus in our latest report.

In each Customer Insights report, we provide a one-page summary of qualitative — and select rating and quantitative — insights from the SolutionMap peer review process. The Customer Insights summary includes ratings on how well the vendor meets user expectations, three key differentiators for the vendor and a list of quotes about the vendor’s greatest strengths.

Fiverr, Online Services Marketplace, Is Going Public: What You Need to Know (Part 2) [PRO]

Coworks

This two-part Spend Matters PRO series examines the online services platform provider Fiverr, which recently announced that it is going public (presumptively this month). The company — which has brought a fresh, distinct approach to the business market for freelancer-driven, platform-based work/services — will become the next business in the category to IPO after Freelancer.com (ASX: FLN) in 2013 and Upwork (NASDAQ: UPWK) in 2018.

Becoming a public company can be accompanied by opportunities for business validation, market awareness, access to capital, etc., but it brings new responsibilities, transparency and challenges (especially in a market that — despite getting kicked off in the mid-2000s — is still immature and evolving). Do these IPOs mark the start of a new stage of market development when businesses of all sizes may begin to accommodate and scale their new workforce models? If so, what do procurement practitioners and senior business executives know about Fiverr and the market that it and other work/services platforms operate in?

In Part 1, we examined Fiverr as an online work/services platform business (background, go-to-market strategy, solution offering and financial picture).

In Part 2, we will look at Fiverr in a broader industry context and provide a high-level comparison to Freelancer.com and Upwork. We also offer insights for procurement practitioners and executive leadership in larger organizations who are trying to get a handle on the potential supply channel of online/remote, freelancer-based work/services platforms.