The 2018 Gartner Magic Quadrant for Procure-to-Pay Suites has been released.  You can download the full report here or here.

The Leaders

The “Leaders” quadrant of the 2018 Gartner Magic Quadrant for Procure-to-Pay Suites are SAP (Ariba and Fieldglass) and Coupa, with Jaggaer and Basware lagging a bit, but still making it in the coveted upper-right quadrant.

Those of you who are serious about these reports can easily obtain them, so I’m not going to cover the findings in any detail.   For most of you, the only surprise will be that there is a Polish systems integrator, Comarch, listed in the “niche players” quadrant.  I’ve been following this market for a long time and had never heard of them, but their list of clients (see here) is impressive.  (It’s unclear how many of these clients are for P2P software.) Comarch is also public and sports a market cap of about $350 million.  It just goes to show what a big world it is!

Relative Market Caps are More Interesting

I’m interested in the relative market capitalizations of these companies, especially given the number of them that are publicly traded, as well as the recent, intense investment activity in the sector.  So, as I have done before (see here), I’m adding what we know about the market caps of the various players to the 2018 Gartner Magic Quadrant for Procure-to-Pay Suites.

A few comments are in order:

• The SAP Ariba plus FieldGlass market cap of $5.5B does not include Concur, which would add about $8.3B  And all of those values are from around 2014.  Based on SAP’s last investor presentation, the SAP Business networks segment, which includes all three companies provided:
  • about $2.2 billion in revenue in 2017
  • 77% gross margins
  • a 16% operating margin and
  • a 20% projected growth rate.

The bottom line is that SAP paid $13.8 million for these businesses, but they could be worth well north of $25 billion now.  This history bodes well for those who are bullish on Coupa whose market cap is now $3.0 billion.

• Coupa, Basware, Proactis/Perfect, and Determine are all publicly traded.  Those are current market capitalizations.
• Tradeshift, Ivalua, and Jaggaer are all still private.   Their valuations are therefore subject to speculation. Each of these companies has raised substantial money in the recent past.  In fact, Tradeshift raised $250 million last week (see here).

The 2018 Gartner Magic Quadrant for Procure-to-Pay Suites vividly demonstrates how intense the race for #3 is in this market. Tradeshift has built quite the war chest, Jaggaer has the backing of Accel-KKR, and KKR (different firm) backs Ivalua.  With Basware also engaged, it will certainly be a fight to the Finnish. (See what I did there?)