Working capital solutions provider Taulia will be added to the diverse list of SAP acquisitions after the German tech giant announced its intent to buy a majority stake in the San Francisco-based company.
Since its inception in 2009, Taulia has been offering early payment to businesses through accounts receivable financing, dynamic discounting, and supply chain financing. Although the financial details of its recent transaction with SAP were not disclosed, the deal follows a major investment round in July 2020 which saw Taulia raising US $60 million from backers including Saudi Aramco, Ping An Insurance Co., and J.P. Morgan.
According to a joint press release from SAP and Taulia, J.P. Morgan will keep its strategic alliance with Taulia and maintain its equity stake in the fintech provider, despite SAP acquiring a controlling majority of the company. Commenting on the latest development, J.P. Morgan Global Head of Trade & Working Capital Stuart Roberts said:
“This news is very exciting for both Taulia, our successful strategic alliance partner, and SAP as the new majority owner.”
“With SAP, we expect the strategic alliance between J.P. Morgan and Taulia will unlock new opportunities for us to serve our clients, and to inject and redeploy liquidity to suppliers as the world continues to manage impacts from the pandemic on the global supply chain,” he remarked.
Adding Taulia to the List of SAP Acquisitions
News of the planned Taulia acquisition came after the German enterprise software multinational released its Q4 and full-year results this month, reporting a 6% increase in cloud and software revenue to €6.99 billion. The momentum is reflected in the success of the Business Transformation as a Service (BTaaS) cloud offering, RISE with SAP, as well as remarkable growth across the company’s entire portfolio.
SAP Chief Financial Officer Luka Mucic believes Taulia strengthens the tech giant’s portfolio and adds financial flexibility and stability to the company — factors that are critical to making supply chains more resilient. He further explained:
“By combining the deep working capital management expertise of Taulia with SAP’s broad CFO solution portfolio and the integration into our core business software and Business Network solutions, we are well-positioned to become a leader in working capital management. We will offer these capabilities at scale to help businesses improve their financial position and seize growth opportunities.”
As part of the new partnership, Cédric Bru will continue working as Chief Executive Officer of Taulia while Mucic will become the Chairman of the Board. Moreover, Taulia will run as an independent entity with its brand within the SAP Group so that non-SAP customers can continue to benefit from Taulia’s product portfolio.
Expressing his delight at the company’s integration with SAP and its ecosystem, Taulia CEO Bru said that this will help them contribute to SAP’s vision and be able to serve more customers. He added:
“Cash is the oxygen businesses need to breathe during challenging economic cycles and growth sprints. Coming together with SAP will help accelerate Taulia’s mission of helping businesses thrive by unlocking liquidity trapped in supply chains.”
Expanding SAP’s Working Capital Management Portfolio
Recognised for its technology platform and solution portfolios in the working capital management industry, SAP stated that Taulia has been “an important partner” with proven integration with the company’s solutions. Aside from aiming to provide better access and increase companies’ cash flows, the proposed deal is also expected to further strengthen SAP’s solutions for the CFO office and expand the SAP Business Network.
Furthermore, adding Taulia to the list of SAP acquisitions intends to help the SAP ecosystem as customers can take advantage of early payment options with predictable off-balance-sheet funding to improve their liquidity. The German tech giant also plans to provide a wider range of financial services for banks and insurance firms in its platforms, solutions, and services.
SAP Fioneer, which was launched in September last year and is part of the company’s strong partner ecosystem, is said to play a key role in SAP and Taulia’s offerings. As a dedicated Financial Services Industry (FSI) co-owned by SAP with entrepreneurial investor Dediq, SAP Fioneer is the tech giant’s response to the demands of clients in accelerating digital innovation in FSI-specific, core insurance, core banking, and enterprise-class solutions.