Spend management provider Coupa has bolstered its data
analytics capability with the acquisition of Spend360, a U.K. data management
and analytics tool that uses machine learning. The deal closed at the end of
December.
Coupa's existing data analysis offering until now has been limited
to the data that's processed and contained on the Coupa platform. To offer customers
the ability to analyze spend outside its platform, it would partner with
companies like Spend360 and KPMG, according to Coupa VP of strategy and product
marketing Donna Wilczek.
"[Spend 360] is complementary technology around data
classification and data cleansing where any data, wherever it has originated,
can be processed through this engine," Wilczek. "That's a really big
thing because what we're finding is that businesses are running so many
technologies and they don't have a good handle on where they are spending."
Spend360 can accept data in different formats and languages via
direct integrations with companies' enterprise resource planning systems and
other business systems or via files provided by clients. The company claims a
differentiation from the market in that it uses machine learning rather than
rules-based programs or actual people to compile and analyze data. This allows Spend360,
for example, to learn to identify when different systems refer to a hotel by
different names and then to classify it under the same spend category. This enables
companies to more accurately view spend with each supplier.
While Coupa plans to integrate the Spend360 capability into
the Coupa platform in the future, Coupa clients can purchase the offering soon
for a fee. The company has yet to finalize pricing, and Wilczek said implementation
could take a few weeks.
Coupa will inherit the full Spend360 team and its data
warehouse, which has processed more than $1 trillion in spend since launching
in 2011, Wilczek said. Coupa also will gain Spend360's customers, which
research firm Spend Matters estimated at more than 400 worldwide. Coupa and
Spend360 are both clients of Spend Matters.
"From a strategic perspective, it's a really important
acquisition even though it's really small because [procurement management tool]
SAP Ariba—and Concur is part of SAP—has this [spend-classification] technology and Coupa did
not," said Jason Busch, founder and head of strategy and research at Azul
Partners, which owns Spend Matters. "Now, Coupa can go to any size
customer and say, 'We can bring you best-in-class spend classification.'"
Busch said it will probably be easier for Coupa to upsell
the Spend360 capability to its customers than to upsell the Coupa spend
management platform to Spend360 clients. Still, the opportunity for both is
there. "In the end, Coupa can say, 'Well you should be putting this [spend]
through Coupa regardless,'" he said. "That's clever."
The expense and spend management sector has been heating up
since SAP
acquired Concur in 2014. Coupa closed its IPO
in October, and Busch and other analysts said the money raised would fund more acquisitions.