Author Archives: Jason Busch



About Jason Busch

Jason is the founder of Azul Partners, a B2B research and digital media firm. He currently serves as Managing Director, Spend Matters Nexus, a membership program, providing market intelligence, strategy and due diligence advisory for private equity firms and investors. It also provides insight for CEOs, boards and leadership teams covering strategy, corporate development and business development/partnership areas. For all members, Spend Matters Nexus offers invitation-only networking opportunities. Prior to Azul Partners, Jason got his on-the-job education in procurement technology working at FreeMarkets for five years in a variety of roles. Before that, he started his career in consulting and merchant banking. Jason holds undergraduate and graduate degrees from the University of Pennsylvania. Current investment disclosures: Azul Partners, Inc., Koble, Inc., Knnected Inc. (DBA SupplyHive), Public Spend Forum, LLC, Price Dynamics LLC (DBA MetalMiner Metal Price Benchmarking), Sigaria Ltd. (DBA Procurement Leaders)., Simfoni Group Ltd., Spendata LLC and Spend Matters Europe Ltd.


Icertis becomes first true CLM unicorn, with $115M funding round — and it sits atop a market that’s red hot and ripe for M&A

Global Risk Management Solutions (GRMS)

Icertis announced today that its latest funding round raised $115 million and that the provider of contract lifecycle management (CLM) is now valued at more than a billion dollars, reaching proverbial “unicorn” status.

The funding round was led by two groups, Greycroft and PremjiInvest, with participation from B Capital Group, Cross Creek Advisors, Eight Roads, Ignition Partners, Meritech Capital Partners and PSP Growth, according to a press release. The latest round brings total funding to date to $211 million, the release said.

Mark Terbeek, a partner at Greycroft, said in the release: “We’ve seen (Icertis) become the undisputed CLM leader, acquiring a huge stable of blue-chip customers and generating a return on capital that is among the best we’ve ever seen. We have no doubt they will become the next giant in the enterprise SaaS market.”

The release also noted that “the AI-infused Icertis Contract Management (ICM) platform is used by companies like 3M, Airbus, Cognizant, Daimler, Microsoft and Sanofi to manage 5.7 million contracts in 40+ languages across 90+ countries.”

Icertis is private and doesn’t disclose revenues, but it has been growing extremely quickly (claiming 125% CAGR over the last four years), and with over 800 employees, a forward-looking revenue run rate approaching $200 million seems reasonable, and only requires a 5X multiple to get to a $1 billion valuation (we believe the revenue multiple to be higher than this).

Also, Icertis is a clear market leader in the CLM space based on our latest Q2 2019 SolutionMap deep-dive competitive assessment (available here for free). And, Icertis competitor Exari was recently acquired at roughly a 10X multiple, so there should be little doubt about Icertis’ favorable prospects.

Icertis announced that its new $115 million in funding will be used for continued product development in adjacent product areas (and geographies), verticalization, possible acquisitions, blockchain development and, of course, AI — which is red hot in CLM.

Spend Matters has covered Icertis for years, and while the firm’s stated mission to “become the contract management platform of the world” may seem a bit audacious, the firm has executed historically well due in part to its strong management team and focused strategy as a true CLM pure play that doesn’t focus on any one particular business process area (e.g, within the sell-side for customer contracts).

The firm is also buoyed by the fact that the CLM market is throwing off its shackles as a place for glorified document management systems set up by legal departments to transfer commercial risk to counterparties. Rather, contracts are becoming the ultimate system-of-record for B2B commerce, not just from a legal department standpoint, but a financial one (e.g., where contracts become the new ledgers that augment the G/L), a regulatory/risk standpoint, and an operational one relevant to any place where internal/external stakeholders make commitments to each other.

We call this concept “commercial value management” (CVM), and we discussed its framework in a recent Spend Matters PRO research paper titled “Commercial Value Management: Making Contracts the Commercial Core of Enterprise Value (Part 1).” In it, we stated:

“There is a subtle shift happening within the scope of contract and commercial management (CCM), and a not-so-subtle shift that is also happening within the digital realm (e.g., namely artificial intelligence, low-code platforms, open source, “XaaS”). What’s happening is that as contracts get digitized and more deeply modeled, they are becoming the single most important piece of master data within the enterprise that touches virtually every single stakeholder within these core processes and also within corporate functions such as R&D, risk management, strategic planning, treasury, audit, sustainability, digital/innovation and others.”

In the rest of this Spend Matters PRO / Nexus brief, we’ll examine the following topics:

* Icertis’ prospects relative to multiple CLM market segments and competitors
* How CLM’s evolution to “CVM” impacts Icertis. (Think of CVM as “extended CLM” on steroids.)
* M&A, exit and other considerations for Icertis — including potential acquirers as an alternative to an IPO.

And in a subsequent deeper dive in the August/September inaugural Spend Matters Nexus members’ newsletter for private equity firms/investors, corporate development teams and solution provider CEOs, we’ll feature Icertis and analyze:

* Icertis’ strategy: lessons learned and key takeaways
* Valuation drivers (for Icertis and similar firms) and possible Icertis M&A acquisition prospects/targets
* The prospects for procurement suite providers with legacy CLM capabilities and Apttus, Conga and others in a CVM world

OK, let’s get to it …

Jaggaer Deal: 5 Enterprise Value Creation Takeaways Learned From Shaping a Procurement Workhorse (Not Just a Unicorn)

Last week, Jaggaer announced that Cinven, a European-based private equity firm, had acquired a majority stake in the provider. Various sources, including Bloomberg, place the enterprise value of the transaction, including debt, at $1.5 billion. But as in all private company valuations, it is important to exercise caution in reported numbers and even more so “unofficial” numbers, given the various minority ownership interests, debt, covenants and other considerations associated with such a transaction.

Regardless, we suspect that Accel-KKR, which previously held a majority stake and retains an ownership interest in Jaggaer — as well as Italmobiliare, the original owner of BravoSolution, and a near 10% owner in Jaggaer prior to Cinven’s investment — post transaction, materially increased the enterprise value of the combined SciQuest, BravoSolution and Pool4Tool assets that it brought together under the Jaggaer umbrella. This Spend Matters PRO and Nexus research brief quickly analyzes the state of Jaggaer post-Cinven investment and provides five takeaways for investors, CEOs, corporate development professionals and others curious about the synergies that Accel-KKR created.

Coupa’s 3 Special Forces Teams (Part 2: Alliances/Business Development)

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.

Announcing Spend Matters Nexus — Where Capital and Strategy Converge

As I hinted at last week, we’re excited to announce the launch of a new research, advisory and networking organization — Spend Matters Nexus.

The Nexus membership program is designed for investors/acquirers (private equity, corporate development, etc.) and solution provider CEOs in the procurement and finance technology/solution ecosystem. Membership offers a new strategic lens to the solution areas covered on Spend Matters.

Nexus was borne out of an increased demand for research subscriptions, due diligence and strategy support with our private equity clients in late 2018 (which has picked up exponentially this year). But recently, our team realized there was a flip side to working with technology acquirers — providing relevant market intelligence for solution provider CEOs, boards and leadership teams on their own strategy, corporate development and business development/partnership initiatives.

Spend Matters Nexus will hopefully become invaluable for both groups. The goal is to provide market intelligence, strategy and due diligence advisory for private equity firms and investors. For CEOs, boards and leadership teams, the program offers insights spanning strategy, corporate development and business development/partnership topics. For all members, there are invitation-only networking opportunities.

Coupa’s 3 Special Forces Teams (Part 1: Corporate Development)

Coupa has assembled three behind-the-scenes weapons — non-product, non-solution and non-R&D teams — which it uses to great effect to collectively win individual battles against competitors and, at least so far, the broader growth war in the source-to-pay market from a logo growth perspective in recent years. These 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 from the perspective of   long-time industry insider who has seen them put to use effectively from a unique vantage point. Today we start by exploring the first of Coupa’s special forces teams: corporate development.

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.

Zycus Analyst Day — 3 Quick Insights

Along with colleagues Pierre Mitchell, Xavier Olivera and Nick Heinzmann, I attended Zycus’ analyst day in Park City, Utah, on Friday. Analysts from Ardent, Gartner, Levvel (formerly Paystream) were also in attendance. While I’ll leave it to my esteemed colleagues to provide more insightful commentary on where Zycus stands today overall, let me share three quick insights that I walked away with.

Coupa Inspire: My Take on the Event, the Roadmap and My Next Move

In the coming days, you’ll be hearing quite a bit from the Spend Matters analysts who attended Coupa Inspire this week in Las Vegas. While I will officially resign my analyst duties from this ragtag crew of procurement experts, curmudgeons and technology geeks at Spend Matters on July 1 — stay tuned for some news on what I’ll be up to in a couple of weeks* — I could not hesitate to put down a few thoughts on the event: Inspire was big. Lots of prospective customers were here. AI now underpins the story but is not the narrative. Coupa team members are having fun. C is for Community.

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

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.

Procurement Information Architecture and B2B Connectivity: Intel takes RosettaNet into the Future (Part 2)

Editor's note: This is a refresh of our 2014 series on RosettaNet and B2B connectivity, which originally ran on Spend Matters PRO. Read Part 1 here

One of the more curious aspects of the Intel Israel Nipendo implementation (tied into Intel’s RosettaNet standard deployment) for supplier connectivity is that the system realizes a greater percentage of “straight-through processing” (i.e., no human intervention from the PO creation through to supplier payment) than a traditional RosettaNet implementation. The platform provides an innovative and automated pre-validation service that uses a self-service “training” capability, allowing the trading partners themselves to establish the business validation rules and other key system behavior that ensures smooth downstream processing. Read on for discussion of local requirements and a list of key takeaways.

2019 M&A and Investment Dynamics For Procurement Technology and Solutions: Segmenting the Market (Part 1)

Private equity — and other — buyout and M&A interest in the procurement solutions market 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

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.

Today we begin by exploring the “who” by segmenting the types of targets that are garnering the most attention into 10 areas and exploring the first five in detail (procurement technology suites, transaction-focused solutions, payment/financing providers, nimble solutions and leveraged buying / GPO models), including sharing illustrative providers in each segment and why buyers are attracted to each group.

* Our parent company, Azul Partners, has directly advised on more than half a dozen transactions in recent quarters, primarily working in a due diligence and strategy capacity for both strategic and financial buyers, leveraging our proprietary SolutionMap benchmark database, customer satisfaction/peer review benchmarks, PRO research, SolutionMap Insider research, and deep domain knowledge. Azul Partners works with investors in two ways. First, we partner with clients as exclusively retained subject matter experts in these markets. Second, we serve as an “arms dealers,” providing subscription research to hundreds of clients.

Procurement Information Architecture and B2B Connectivity: Intel takes RosettaNet into the Future (Part 1)

Editor's note: This is a refresh of our 2014 series on RosettaNet and B2B connectivity, which originally ran on Spend Matters PRO.

Intel is one of the oldest advocates (and active users, in terms of volume) of RosettaNet as a replacement for traditional EDI connectivity. RosettaNet, a set of process and information connectivity standards based on XML (Extensible Markup Language) originally founded in the late ‘90s, was originally spearheaded by a number of large corporations in the high-tech manufacturing sector. Like EDI, RosettaNet has historically only made sense for larger direct material (e.g., manufactured parts, components, or materials) suppliers or customers. Yet, RosettaNet’s implementations, like those in traditional EDI deployments, have focused primarily on connecting large buyers and/or suppliers for purchase orders, invoices, advanced ship notifications, and other typical high-volume commercial documents. Intel suggests on its own website that the typical criteria for suppliers is that the vendor “should have an interest and the resources necessary to automate their business processes."

Exploring Basware’s Artificial Intelligence (AI) Capabilities and Roadmap: Something For AP and Procurement (Part 3)

Artificial intelligence is starting to transform the value proposition of procurement and finance technologies. But it is not just start-ups that are building new capabilities and gaining momentum. Procure-to-pay stalwarts like Basware are making significant investments in the area as well. This Spend Matters PRO brief explores where Basware’s AI investments are appearing in its invoice-to-pay and e-procurement solutions. Part 1 of this series explores Basware’s recent product enhancements, and Part 2 explores 2019 and 2020 roadmap items.