Industry insiders might argue that the growth of Avetta, Browz, ISNetworld and other industry supplier compliance and credentialing solutions like VendorMate (now part of GHX), GRMS and Hellios should never have been allowed to reach escape velocity owing to the first mover advantage that Achilles had on this market overall. But playing armchair supplier credentialing, pre-validation and certification vendor quarterback is nowhere near as useful an exercise as explaining the history of this market and how it became the largest procurement solutions sector that most buyers know little if anything about — yet is of critical strategic (and growing) importance.
So join us as we provide a history lesson about how this market came about and the value levers it created for buyers and suppliers. This investigation includes exploring how the sector in which Avetta competes can serve as a complement to other supplier management and risk management areas too (which we’ll tackle in more detail in the next research brief in this series).
If you’re just coming up on this market and the merger of Browz and Avetta, read the first research brief in this series (Avetta, Browz to Merge: Facts, Solution and Market Overview), which explored the core details and numbers behind the two companies coming together under the Avetta name.
Corcentric recently announced its pending acquisition of Determine (see previous Spend Matters PRO analysis: Transaction Overview and Customer Recommendations and Competitive Landscape Analysis — and news coverage here). But in buying Determine, what exactly is Corcentric gaining from a procure-to-pay perspective (i.e., product, solution and platform strengths and weaknesses)? And how do Determine’s capabilities stack up in the market overall relative to peers on a granular basis?
To answer the latter question, you can turn to the latest Q4 2018 SolutionMaps for e-procurement, invoice-to-pay and procure-to-pay SolutionMap Insider provider scoring summaries. For those interested in viewing Determine from a broader source-to-pay perspective, there is a SolutionMap for you as well. Each report provides comparative overall and “deep-dive” capability insight (e.g., catalog management, requisitioning, invoicing compliance, etc.) as well as detailed customer reference benchmarks. Determine is one of dozens of providers featured in these granular, comparative vendor ratings analyses — others include Basware, BuyerQuest, Coupa, Ivalua, Jaggaer, Oracle, SAPAriba, Tradeshift, Taulia, Vroozi and Zycus — designed to aid shortlisting and selection decisions.
But to provide insight into overall product strengths and weaknesses for P2P, let’s dive right in today as we offer a summary view of where Determine stands out from the pack — and where it trails its peers. We’ll offer a similar analysis for sourcing, supplier management, contract lifecycle management (CLM) and spend/procurement analytics (collectively Strategic Procurement Technologies in SolutionMap) in a subsequent research brief in this series.
Avetta announced earlier today that it and Browz are merging. Together under the Avetta name, the two providers of supplier management and supply chain risk management will become one of the clear leaders in perhaps the most “under the radar” procurement solutions market. The general focus of these two providers is on supplier and contractor on-boarding, pre-qualification and virtual auditing in support of vendor compliance, environmental, health and safety, risk management and related initiatives. SaaS-based enablement is a component of what Avetta and Browz do, but the real value they bring is based on the network impact and scale economics focused on supplier/contractor intelligence they provide to buyers and suppliers alike on a many-to-many basis.
Avetta, Browz, ISNetworld, Achilles and other similar solution providers compete in this somewhat niche — though quite sizeable and rapidly growing — area of the supplier management and supply chain risk management worlds. While not as well-known as providers like Coupa, Jaggaer and Ivalua (let alone SAP Ariba and Oracle), these four providers — along with a handful of other vertical and geographic specific providers — represent one of the fastest growing $500 million+ procurement solutions markets (2018 revenue), one that the vast majority of procurement and supply chain organizations know quite little about the inner workings of.
For many Spend Matters readers, this really is the largest procurement solutions market you’ve never heard of.
Over the course of the coming weeks, this Spend Matters PRO series will explore the combination of Avetta and Browz and what it means for the market. It will also unpack this market segment and explain how it fits alongside supply chain risk management, supplier information management (SIM), supplier performance management, master data management and adjacent sub-components of the supplier management market. We’ll also provide an outlook for customers of these solutions and for the broader growth of this sector as well (which Avetta pegs at a $14 billion market potential based on a referenced study to McKinsey in a briefing with Spend Matters prior to the deal announcement).
Today, we will start with a quick overview of the Avetta and Browz deal itself (facts/figures, estimated revenues, rationale, analysis, etc.) based on a variety of sources. Part 1 also includes a brief history of both providers and an overview of the current state of this market. For this series, our reference inputs include an interview earlier this week with the CEO of Avetta, John Herr, and over a dozen of other interviews conducted in recent years, as well as existing Spend Matters research (see previous Spend Matters PRO coverage on Avetta: Introduction/Background, Strengths / Weaknesses and Competitive Analysis/Customer Recommendations).
Two providers of supply chain risk management, Avetta and Browz, announced Thursday that they’re joining forces under the Avetta name to serve a combined 85,000 clients. Terms of the deal were not disclosed. Avetta CEO John Herr, who will lead the combined companies, said in an interview that the company will now have the “critical mass” in staff, clients and geography to expand and compete in existing areas and new markets. Herr said the global marketplace for supply chain risk management solutions is valued at $14 billion and that it has a lot of room for growth.
A new report for Seal Software sheds light on how companies’ legal departments are preparing for or using the latest tools associated with artificial intelligence to analyze contracts for hidden opportunities and risks, according to the white paper by Ari Kaplan Advisors. Seal uses machine learning and other technology to review contracts, extract data and do analytics, the California-based company said in a news release. It all adds up to a “Contract AI” solution. Some respondents pulled back the curtain on how they’re deploying the technology.
Corcentric’s pending acquisition of Determine will create one of the more unique procurement and finance solutions providers in the market. In addition, the transaction, upon closing, will firmly establish Corcentric as a software (SaaS/cloud platform) provider in the source-to-pay sector. But what are the implications for Corcentric’s and Determine’s customers and the broader competitive market?
Part 1 of this Spend Matters PRO brief provided an overview of the combination (by the numbers), an analysis of the transaction/valuation and our “elephant in the room” observations.
Today, we turn our attention to customer recommendations for Corcentric and Determine users and offer a perspective on the competitive landscape implications of the transaction.
In later PRO briefs, we will offer our view of Determine’s functional strengths and weaknesses in both the procure-to-pay (i.e., e-procurement and invoice-to-pay) and strategic procurement technologies (e.g., sourcing, CLM, etc.) areas.
Earlier this week, Corcentric — a provider focused at the intersection of accounts payable automation, order-to-cash, trade financing, procurement consulting and group purchasing organization (GPO) software and services — announced its most strategic software acquisition to date: Determine.
But what are the highlights of the transaction? How do the proposed terms of the combination address Determine’s balance sheet liabilities — and more important, what is our summary analysis of Corcentric + Determine?
In this two-part Spend Matters PRO brief, we will provide an overview of the combination (by the numbers), an analysis of the transaction/valuation, our “elephant in the room” observations, summary recommendations for Corcentric and Determine customers and an analysis of the competitive landscape implications of the transaction.
In later PRO research briefs, we will offer our perspective on Determine’s functional strengths and weaknesses in both the procure-to-pay (i.e., e-procurement and invoice-to-pay) and strategic procurement technologies (e.g., sourcing, CLM, etc.) areas and what these bring to Corcentric, and, with sufficient distribution (that they lack today, at least in North America), what they could bring to the broader source-to-pay market.
Spend management provider Corcentric announced early Monday that it is buying Determine, a provider of source-to-pay and contract lifecycle management solutions, in a deal worth about $32 million for most of Determine’s assets, according to a press release. Corcentric, based in New Jersey, is a provider of procurement and finance solutions that help companies purchase, pay and get paid, and Determine is a French company that’s main offering is the Determine Cloud Platform, which provides procurement, legal and finance professionals with analytics for their supplier, contract and financial performance, the press release said.
After Scanmarket announced last week that it had sold its e-sourcing business to an equity partner, co-founder Ole Nielsen spoke with Spend Matters UK/Europe Editor Nancy Clinton.
In a Q&A, Nielsen touches on the 1999 origins of the company (making one of the first online B2B marketplaces), he delves into the reasons behind the sale and displays the personal attention to detail that has made the sourcing provider known for its ease of use.
“We were more concerned with staying true to our mission of getting the right fit,” he says. “That’s why we chose to partner with Verdane; they were like-minded in our business plan and direction of the company.”
Scanmarket, a strategic e-sourcing provider, announced it has sold a 90% stake in its source-to-contract (S2C) company to private equity firm Verdane. The founders of Scanmarket, CEO Betina Nygaard and CCO Ole Nielsen, will retain a 10% share and continue to lead development at the Denmark-based software firm, according to the announcement. Spend Matters lead analyst Michael Lamoureux said the company has “a lot of potential, and a track record to back it up.”
Today, I’ll share a critical 10th prediction (arguably the most important of all) of our M&A predictions series. Please allow me to indulge my last prediction in a folksy, CliffsNotes way to get both the seasoned experts on sector deals — of which we can count on just a few fingers — and everyone else on the same page as to what’s really happening.
In the third installment, I shared three additional predictions exploring how the procurement technology landscape is shifting as we enter 2019. The most recent prognostications centered on the rising intersection of procurement technology with payment and financing as a consolidation driver, more sellers engaging in proactive processes and unorthodox groups of strategic buyers emerging from left field on some deals.
These predictions build on the second installment of our M&A predictions for 2019, during which I explored an expanding focus on services procurement (assets), the increasing interest in strategic procurement technologies (SPT) and the scarcity of e-procurement and procure-to-pay targets left in the market.
And in the first installment in the series, I analyzed the deals that have happened already in 2018, as well as our first three of 10 prognostications for next year. First, private equity firms will play an increased role in the sector. Second, valuations will be all over the map. And third, peripheral players will respond to the “Amazon effect."
Happy holidays everyone and happy deal hunting in 2019! Let’s get into the final prediction.
In the second installment of our M&A predictions for 2019, I explored an expanding focus on services procurement (assets), the increasing acquisition interest in strategic procurement technologies among buyers, and the scarcity of e-procurement and procure-to-pay targets left in the market. This builds on the first installment in the series, in which I explored the deals that have happened already in 2018, as well as our first three of 10 prognostications for next year. First, private equity firms will play an increased role in the sector. Second, valuations will be all over the map. And third, peripheral players will respond to the “Amazon” effect.
Today we turn our attention to three additional predictions. Everyone who knows me in this space knows that my greatest weakness is to wax on — not usually eloquently. So I’ll try to go straight to the point with the next predictions in the 2019 procurement technology and solutions M&A lineup.
