Author Archives: Jason Busch



About Jason Busch

Jason is the founder of Azul Partners, which he started in 2004. He is regarded as one of the leading experts in the scintillating world of procurement, finance and supply chain technologies. Jason currently serves as Managing Director of Spend Matters Nexus, which provides market intelligence, strategy support and due diligence advisory for private equity firms, CEOs and corporate development teams. Prior to Azul Partners, Jason got his on-the-job education in procurement solutions working at FreeMarkets in corporate development, strategic sourcing, marketing and other areas. Before that, he started his career in consulting and merchant banking. Jason holds undergraduate and graduate degrees from the University of Pennsylvania in English Literature and History.


10 Theories on Procurement Technology Venture Stage Investment (Thesis 5: ‘Push’ Savings)

In a series of columns that stem from investing ideas that excite me, I’ll share 10 theories that I believe will drive investments in earlier-stage (angel/seed and Series A/B) start-ups in the procurement technology market. For perspective, Thesis 1 looked at automation and vendors in that space. Thesis 2 looked at providers of marketplace solutions. Thesis 3 looked at UI/UX technology and adoption in the start-up stage. Thesis 4 dug deeper into bridge solutions. Today, let’s dig deeper into push savings.

Oversight Systems — TCV acquisition, spend compliance intro and sector musings

Mergers and Acquisition News in procurement industry

On Wednesday, Oversight Systems announced that TCV, a private equity firm, had acquired a majority stake in the provider of spend compliance solutions from Luminate, the previous investor.

Oversight competes in the spend compliance market, a clever overlay that sits alongside — or on top of — source-to-pay process and data flows, primarily for indirect and expense-based spend. It augments the capabilities of spend management and T&E providers, although Coupa does have home-grown capabilities in this area as well.

Oversight largely grew under the radar in recent years, and it is not well known in the procurement and finance technology sector. But along with Appzen, Oversight has carved out a leadership position in this market (although there are material differences between the two providers).

While both providers are worthy of consideration for organizations looking to complement existing procure-to-pay and T&E investments, we’ll leave additional practitioner analysis to a PRO update in the months to come, and today will focus our Spend Matters Nexus coverage on explaining this market segment and how Oversight Systems slots into it. We’ll start with a back-of-the-napkin estimate on the transaction.

Related coverage:

CORONAVIRUS RESPONSE: Fraud, P2P and Vendor Management Safeguards — Protecting cash and rapidly vetting suppliers in a crisis 

Oversight Systems: Vendor Analysis (Part 1) — Background and Solution Overview

Oversight Systems: Vendor Analysis (Part 2) – Product Strengths and Weaknesses

Oversight Systems: Vendor Analysis (Part 3) — Competitive and Summary Analysis

Jason Busch is Managing Partner of Azul Partners’ Investor Advisory Group. He works with sponsors, CEOs and boards on data-driven due diligence, M&A and business strategy. Jason is also the lead author of Spend Matters Nexus, a private newsletter.

10 Theories on Procurement Technology Venture Stage Investment (Thesis 4: Bridges)

In a series of columns this summer, I’ll share 10 theories that I believe will drive investments in earlier-stage (angel/seed and Series A/B) start-ups in the procurement technology market.

Thesis 1 looked at automation and vendors in that space. Thesis 2 looked at providers of marketplace solutions. Thesis 3 looked at UI/UX technology and adoption in the start-up stage. Now let’s dig into bridge solutions.

10 Theories on Procurement Technology Venture Stage Investment (Thesis 3: UI/UX & Adoption)

Oracle

In a series of columns this summer, I’ll share 10 theories that I believe will drive investments in earlier-stage (angel/seed and Series A/B) start-ups in the procurement technology market. Thesis 1 looked at automation and vendors in that space. Thesis 2 looked at providers of marketplace solutions. Today, we'll look at user interface technology in the start-up stage.

10 Theories on Procurement Technology Venture Stage Investment (Thesis 2: Marketplaces)

I love B2B marketplaces. At least intellectually. That’s why the topic of marketplaces is part of this series on early stage procurement technology investing. Thesis 1 looked at automation and vendors in that space, and today we’ll look at providers of marketplace solutions.

5 Themes That Excite Me About Procurement & Finance Tech Venture Investing

procurement

I’ve spent over 20 years studying the procurement solutions and technology market. A tremendous amount has changed in this time.

When I first wrote a column for Information Week about B2B negotiations and reverse auctions in early 1999 before meeting the founders of FreeMarkets — who convinced me to leave management consulting and join them — there were perhaps a dozen providers in the market with any commercial traction.

To say the sector has grown up is an understatement!

There are over 1,000 providers out there today that my Spend Matters colleagues track (a number that is growing weekly).

Besides the sheer growth, there are five key reasons I’m excited about this market today from a seed/angel and venture perspective. These are:

Coupa acquires BELLIN, targeting treasury management (Part 2: TMS Market, Competitors and TAM / Market-Sizing Considerations)

procurement

Last week, Coupa made the surprise move to push its business spend management suite into an adjacent space that no other source-to-pay, procure-to-pay or AP automation solution vendor has gone before: the world of treasury — and specifically, treasury management systems (TMS).

See initial Spend Matters Nexus and PRO coverage here:

By acquiring BELLIN to compete in the TMS world, Coupa will ostensibly fortify its position in being able to sell to CFOs as much as CPOs with a broader value proposition (including broader-based payment capabilities than all of its procurement/AP/spend peers can support, at least without a TMS partnership and development of new combined process flows).

But beyond the expanded CFO value proposition and B2B payment intersections, there’s quite a bit beneath the surface with a TMS that could create additional value propositions linked with transactional procurement, supplier management, risk management, invoicing and payment capabilities.

This Spend Matters Nexus brief provides a quick overview of treasury management system market dynamics, including buyer trends and requirements.

It also offers insight into the competitive positioning of some of Coupa’s key competitors in this new market segment, including CGI, FIS (Integrity and Quantum), Ion (City Financials, IT2, ITS, Openlink, Reval, Treasura, Wallstreet Suite), Kyriba, GTtreasury (GTreasury/Visual Risk), Oracle and SAP.

Lastly, the brief shares TAM estimates (total addressable market) for the treasury management and B2B payments market.

The final installment of this three-part Nexus series will examine potential competitive landscape implications for Coupa’s competitors in S2P and P2P, including SAP Ariba, Oracle, Basware, GEP, Jaggaer and Ivalua.

We also will explore the converse: Will treasury management systems providers “push into” the procurement and spend applications world?

Jason Busch is Managing Partner of Azul Partners’ Investor Advisory Group. He works with sponsors, CEOs and boards on data-driven due diligence, M&A and strategy. Jason is also the lead author of Spend Matters Nexus, a private newsletter and subscription service. Disclosure: Azul Partners provided due diligence services to Coupa as part of this transaction.

Coupa acquires BELLIN, targeting treasury management (Part 1: BELLIN Analysis, Treasury Background, TMS Components & Procurement / AP Intersections)

Mergers and Acquisition News in procurement industry

The worlds of procurement and finance continue to collide. Earlier today, Coupa announced it had acquired BELLIN, one of the few independent treasury management providers in the market. BELLIN offers a full-featured treasury management system (TMS).

TMS solutions typically include capabilities to support cash management, bank connectivity, cash/liquidity forecasting, risk management, accounting/compliance and payments.

BELLIN has historically competed in a market where many solutions are not entirely substitutes for each other (e.g., comparing SAP Treasury and Risk Management to Kyriba is not apples-to-apples).

The same could be said for Ion’s portfolio of solutions (e.g., Reval, IT2, Wallstreet Suite, Treasura, Openlink, City Financials + commodity management plays, etc.), FIS, GTreasury and others.

This Spend Matters Nexus brief sets the context for Coupa’s acquisition of BELLIN. It begins by introducing BELLIN and then provides insight into how a broad-based procurement/finance/spend suite such as Coupa dovetails with the treasury function.

Subsequent Nexus analysis will focus on fleshing out the benefits of bringing together treasury and P2P capabilities, looking at treasury management’s total addressable market (TAM) in the context of source-to-pay — and B2B payments! — as well as the implications of this transaction on the competitors in the market.

Jason Busch is Managing Partner of Azul Partners’ Investor Advisory Group. He works with sponsors, CEOs and boards on data-driven due diligence, M&A and strategy. Jason is also the lead author of Spend Matters Nexus, a private newsletter and subscription service. Disclosure: Azul Partners provided due diligence services to Coupa as part of this transaction.

SirionLabs raises $44 million, signals its arrival at the CLM winners podium

procurement

SirionLabs just announced it has raised $44 million in a Series C round that brings cumulative fundraising to $66 million for the contract lifecycle management firm with 400+ personnel. This is a major funding round and vote of confidence for SirionLabs as it moves into the leading positions top CLM market players, which includes providers such as:

  • Icertis, the current unicorn in the CLM pack. Both Icertis and SirionLabs are based in the U.S. with large development teams in India.
  • DocuSign, the ubiquitous e-signature vendor that has moved up the value stack by acquiring sell-side-centric CLM player SpringCM and also acquiring AI-pioneer Seal Software (a very smart move).
  • Apttus, now owned by Thoma Bravo, just announced its acquisition of Conga to help it penetrate the huge Conga customer base (another smart move albeit with some CLM application overlap in the portfolio).
  • Agiloft, an innovative CLM and services management application provider built upon a no-code platform that brings usable RPA and AI “in a box” alongside the apps.

We’ve been covering SirionLabs (and all of these players) for a long time. In its six-year history SirionLabs started out as a niche tool for managing strategic third-party relationships (and the contracts that sit underneath). It’s the detailed modeling of those complex services contracts that SirionLabs has mastered. You can see this in the webinar that we participated in with Unilever where Unilever has used SirionLabs to handle complex services contracts with literally tens of thousands of contractual measurements.

It’s this ability to model complex service levels and obligations (and the associated risks, opportunities and downstream “value leakage”) with a best practices knowledge base that is embedded into its system content and analytics (much of it with robust native machine-learning capabilities). This is why we’ve counseled SirionLabs to go all guns blazing into CLM, because in an everything-as-a-service (XaaS) world that is increasingly digitized, externalized and complex, the contract gets elevated from a one-size-fits all risk transference document owned by the legal department to an ultimate commercial system of record for business value — especially in B2B (this is also far more than a siloed sell-side CPQ systems that configure customer-facing proposals/quotes).

We call this new prospect for contracts and business value “Commercial Value Management” and it’s an underlying competency that underpins all enterprise business applications that manage processes or services that deliver business value — hopefully all of them!

SirionLabs has attained “Value Leader” status in our CLM SolutionMap for a while, with good reason: It has leading solution capabilities and it gets good marks from its customers. Some of the other industry analyst firms are only now starting to wake up to SirionLab’s capabilities. Our SolutionMap has hundreds of requirements in it and reflects our deep assessment and also pure voice-of-the-customer assessments, which is a differentiated methodology relative to the “magic wave scape matrices” out there. In fact, we’re in the midst of evaluating SirionLabs right now for our upcoming Fall 2020 SolutionMap release, and they’ve made huge strides in usability and AI, while furthering the embedding of deep knowledge and best practices into the platform.

So, how will the CLM battle play out with some of the players above? And what does this mean from an M&A and investment perspective? We’ll address this now in the rest of this Spend Matters PRO brief, and we offer some related PRO articles below.

3 Deals Signal a Changing M&A Landscape in Procurement Technology and Solutions (Part 1: Coupa-ConnXus)

Mergers and Acquisition News in procurement industry

Despite coronavirus lockdown measures, the past couple of weeks have seen a flurry of deal announcements in the procurement technology and solutions world (which represent the M&A “re-start” of about a dozen material transactions that you’ll be hearing about for the rest of the year).

Deal activity is not just financial engineering. It is form following function. And form in this case is the fact that procurement technology and solutions are still going strong in most cases inside companies and government. In other words, they’re still buying stuff, at least in many cases.

The reason procurement technology and solutions, even in the economic uncertainty maelstrom of COVID-19, are still hot compared with other sectors is simple: No other set of capabilities or tech can be tied so directly to cost reduction/takeout, risk mitigation, working capital improvement and process efficiency/automation (yeah, we know what that can sometimes be code for, but unfortunately it’s true — as labor economists would agree).

In short, even in the current mess, companies and the public sector are still active consumers of procurement technology and solutions. And on the transaction side, deals aren’t slowing down entirely either, even if the debt markets are still a challenge. Moreover, valuations aren’t taking the same hit as in other sectors (either in the private deals we’re seeing or in the capital markets). Coupa’s stock, in fact, just hit an all-time high last week, valuing the company at nearly $13 billion, putting the firm at over 30X revenue on a trailing basis. That’s HUGE.

Still, there’s changes afoot from a deal perspective. And I believe three recent transactions collectively suggest precisely how the M&A landscape is changing.

In this three-part Spend Matters Nexus analysis, I will share my own perspective on the shifts, both from a corporate development lens (what I used to do) and a private equity lens (the practice I lead today for Azul Partners).

Some of these shifts are subtle, others not so much. But one thing is coming into sharp focus for me: More folks are going to miss out on opportunities if they fail to put the right pieces on the chessboard soon.

Deals covered in this series are Coupa-ConnXus, Apttus-Conga, and Bregal Sagemount’s recent $80 million investment in Corcentric.

For each, here are the questions I’ll answer:

  • What is the summary of the transaction?
  • What is the “gotcha” of the deal (for me)?
  • What additional factors make the transaction interesting?
  • What does it signal for tomorrow (why is it an important signpost for the road ahead)?
  • What are the competitive/market implications for sponsors and strategic buyers?
  • What other (related) providers are interesting to look at in the same or similar markets?

For this installment, let’s look at the Coupa-ConnXus deal.

Jason Busch is Managing Partner of Azul Partners’ Investor Advisory Group. He works with sponsors, CEOs and boards on data-driven due diligence, M&A and strategy. Jason is also the lead author of Spend Matters Nexus, a private newsletter and subscription service.

The impact of COVID-19 on M&A and procurement technology investing (Part 2: Private Equity)

Mergers and Acquisition News in procurement industry

Outside of highly targeted or opportunistic investment interests, the technology and solution areas for procurement and finance have only garnered significant attention within the private equity community in recent years. But in less than half a decade, these firms have become a staple in M&A in the sector. And not only has private equity driven the acquisition and buyouts of many of the largest companies in the sector, but it has also been a source of growth capital investments as well (albeit not as frequently). In recent years, just about every process above a certain size — including numerous providers eventually picked up by strategic buyers — involved one or more private equity firms at some stage.

I spend a good portion of my time leading Spend Matters’ effort to provide strategy and due diligence support to these firms, and in recent weeks, I have been in touch with over a dozen colleagues in the industry. Today, in Part 2, we turn our attention to this segment of the market, examining the COVID-19 situation on the private equity markets, in particular, as it pertains to M&A and buyouts.

This Spend Matters Nexus series, including today’s column, is open to everyone during the coronavirus crisis. It provides insight and analysis about what is happening with procurement and finance technology investing — as well as what we can expect in the months to come, as we emerge from the coronavirus disruption.

If you’re looking for a baseline of information on M&A in these markets at the moment, read Part 1 of this series: The Impact of COVID-19 on M&A and Procurement Technology Investing (Part 1: Introduction).

Jason Busch is Managing Partner of Azul Partners’ Investor Advisory Group. He works with sponsors, CEOs and boards on data-driven due diligence, M&A and strategy. Jason is also the lead author of Spend Matters Nexus, a private newsletter and subscription service.