<B> Captura Buys Workflow</B>
By Cheryl Rosen
<I>Bothell, Wash.</I> - Captura Software Inc. today took to the well-traveled technology acquisition trail and bought Workflow Solutions Inc., its former competitor in the rapidly growing automated expense reporting system market.
The alliance unites two privately held companies that until now have addressed different customer niches. By combining forces, they offer a broader reach and higher profile in a market suddenly drawing the attention of large competitors with existing ties to corporate accounting departments--and a stronger argument to take to Wall Street, where they intend to be floating an intial public offering in the next year or two.
"There is a natural consolidation going on in the T&E world as the card companies and travel companies are getting out of the software business," said Captura CEO Dana Bruttig. "Workflow and Captura have been focused in complementary but differing ends of the T&E world."
Captura has been building high-end solutions for Fortune 500 companies, but "in order to solidify our position as a market leader, we needed more coverage in the mid-market," Bruttig acknowledged.
Workflow Solutions, meanwhile, "wanted to move down the path of building an off-the-shelf application driven by parameter rules to address a broader market," said former CEO Cher Paige, who with the acquisition became Captura's vice president of strategic initiatives. "Our game plan was that there are people who are a year down the path and have more money than we do going after the Fortune 500, so let's go where they are not."
Since both companies are privately held, they declined to cite exact sales figures. But Bruttig gave a rough estimate of $5-10 million for Captura's annual sales, while Paige put her company's yearly sales at $1-3 million.
Bruttig and Paige, both female CEOs of T&E software companies in the same state, Captura in Bothell, Wash., and Workflow in Bellevue, "watched each other over their shoulders" until the day they realized they "could fill the whole scope of the marketplace in terms of customer requirements and focus on flexibility by offering both customizable solutions on the Captura side and configurable solutions on the Workflow side," Paige said. "And the synergy we'll get out of sharing our separate experiences over the last months will allow us to bring our collective knowledge together."
Indeed, Captura has been partnering with mega agencies "that play in that Corporate Travel 100 game," including Carlson Wagonlit --which Bruttig credited with taking a proactive and leading role in selling the product as part of ActOne--as well as Rosenbluth and BTI Americas, to distribute its Employees Payables system. Workflow, has been distributing its Net-Expense product through regional agencies such as Arrington Travel in Chicago, Direct Travel in New York, Mutual Travel in Seattle, Omega World Travel in Fairfax, Va., and WorldTravel Partners in Atlanta.
In their general take on the T&E market, the companies follow similar paths, focusing on customers' overall workflow and business processes, and building their systems around the concept of taking a given action based on a set of logical rules supplied by the individual customer. But they differ in that NetExpense is a shrink-wrapped solution, while Employees Payables is a more customized--and more expensive--system, with a more developed front-end interface and a fuller product line that also includes a fleet management system. Also scheduled to hit the market this month is Employees Payables version 2.0, which will offer multi-front-end and Internet access. A Company Payables product scheduled to deploy in about 45 days will handle general corporate procurement beyond T&E expenses.
Bruttig said Captura will continue to offer and update both its own and Workflow Solutions' product lines, but also will integrate the lead position of each--Captura in front-end and intranet development and Workflow in the downloading of corporate card data--into both sets of products.
So is the market finally ready for automated T&E systems? "Absolutely, unequivocally yes," Bruttig said.
"In 1995 and 1996 we were starving, in '97 they started to move and now the stampede is on," she said. "Our pipeline is pages and pages long. And these are people that have a budget, and we have fully deployed customers such as Merrill Lynch that we can show them. We signed 10 customers in all of 1997--and 10 more in the first month of 1998."
And is Captura ready for Wall Street? Is a stock offering in its future? "Absolutely," Bruttig said. "An IPO is 12-15 months down the road, when we have solidified the category of business policy management--not just T&E but the whole breadth of managing business and purchasing policies that will give us that Wall Street sizzle. That is absolutely where we are headed.