The 2021 Gartner® Magic Quadrant™ for Procure-to-Pay Suites debuted last week. There are no big surprises in it, but I feel compelled to add my two cents.
The 2021 Gartner Magic Quadrant for Procure-to-Pay Suites
Here’s the money shot (with my comments superimposed):
The 2021 Gartner Magic Quadrant for Procure-to-Pay Suites is similar to the 2020 version and even earlier ones. (See here and here.) I’ve added comments especially for companies that have published information regarding their procure-to-pay revenue. (An alert reader told me how to find this information deep in SAP’s financials.) (Jaggaer, Ivalua, GEP, Zycus, and Mercado Eletronico are private and have not published revenue or valuation lately.) Oracle is public, but does not specifically report procure-to-pay revenues which are not material to their overall business.
Here are my takeaways from the Magic Quadrant, especially when combined with financial information:
- The procure-to-pay suite market clearly demonstrates the effects of scale and growth on SaaS valuations. Coupa, is 6x the size of Proactis and is growing at 40%. Coupa has a valuation of 30x revenue. Proactis sold for 2x revenue. Esker is in between in terms of size and growth (growing at 18%) and sports an in-between valuation, as well, of 13x revenue.
- I can understand why a seasoned executive like Jim Lucier would take the helm at Medius. If Medius continues to grow at 40% per year it will be worth a lot of money.
- There are a lot of interesting combinations to be considered in Europe.
- Medius and Basware?
- How do Proactis, Mercell, and even Tungsten fit in?
- SAP Ariba’s top line is growing slowly on an admittedly huge base. SAP Ariba’s bottom line is very impressive with a profit-after-tax rate (not EBITDA) of 29% growing at 18.7%. If Coupa is the star of this matrix, SAP Ariba is the cash cow. (BCG reference, anyone?) SAP Ariba is also making noise about building something called the SAP Business Network, but will they stick with it?
- Since the last Magic Quadrant, Coupa added acquisitions in treasury (Bellin) and supply-chain planning (Llamasoft). As a result, Coupa’s clashes with SAP will only increase.
- Finally, Synertrade and Tradeshift, who were on last year’s Magic Quadrant did not make this year’s cut. We are told Synertrade did not qualify because it did not meet the inclusion criteria for customers, revenue, or new customers signed in 2020. Tradeshift did not qualify due to having fewer than 30 enterprise P2P customers and fewer than 15 new customers (of $500M in revenue) in 2020. I was a little surprised at Tradehshift’s exclusion given Tradeshift’s recent announcement, that its virtual card volume is exploding and had 2,000 customers. Then again, Tradeshift is always full of surprises.