Last week, Tradeshift hosted one of its first public events in New York City. This intimate event was hosted and led by CEO Christian Lanng and brought together industry analysts like myself, journalists, bloggers, investors as well as a few customers.
Christian began the day by sharing Tradeshift’s vision and his thoughts on the current eInvoicing/B2B network landscape and Tradeshift’s place in it. The event then broadened into a partnership discussion with Intuit as Lang with the help of Eric Dunn, SVP, Commerce Network Solutions at Intuit, shared more details and insight into Tradeshift’s recently announced Intuit partnership (read more here). The event concluded with a presentation from one of Tradeshift’s newest clients – a large global enterprise whose name cannot be disclosed just yet.
Note that Part 2 of this series will include other aspects of the event including a review of Tradeshift’s CloudScan solution and the new workflow capabilities. Part 3 will provide details around Tradeshift Discovery and the app infrastructure with two apps in particular, Duedil and The Currency Cloud
Tradeshift’s Vision & Opportunity
Langg believes that the opportunity that lies in front of Tradeshift is a great one and will be driven by the dynamic Tradeshift platform that trading partners can utilize to transact, communicate and collaborate and ultimately develop better-connected supply chains. In the eInvoice/B2B network market, however, scale is everything and reaching a critical mass of users as quickly as possible while delivering value to all participants will make the difference between whether Tradeshift becomes the MySpace (unsuccessful social network) or Facebook (no explanation needed) of this space.
According to Christian, “One of the most disruptive things about Tradeshift is that we are innovating in an industry that has not done so for very long”. This is true to some extent; Tradeshift is using new and innovative technologies and approaches in an attempt to break down age-old challenges around adoption and onboarding. For example, from a technology standpoint, Tradeshift is basing its new platform (which will be available in a few months), on HTML 5. HTML5 is a web-based, cross-platform specification and an HTML5-compliant web browser is pretty much a ‘must have’ for any modern mobile operating system. This means that the next version of the Tradeshift platform will work seamlessly with any device, including smartphones, tablets, laptops or desktop and any operating system (i.e. android, iOS, or Microsoft).
Today, the company’s priority is to aggressively grow the network to a critical mass; to do this it is using free eInvoicing and its easy-to-use and modern B2B platform as the “bait” to attract businesses to the network. One of the main strategies to grow the network according to Christian is also to pursue large global multinational clients and help them overcome some of the obstacles, like onboarding a large majority of suppliers, that they have been facing for years with traditional solutions in this space. For example, the new unnamed client noted that Tradeshift was selected to replace its incumbent provider, OB10, in large part due to its approach to onboarding. Additionally, referring to the networks that charge supplier fees, the CEO says, “charging suppliers for eInvoicing is an outdated model” he continues to say, “if you give a supplier a choice of submitting a paper invoice versus submitting an eInvoice that comes with a cost, guess what they’re going to choose?”
Christian makes a great point and for procurement groups, it does or should pose the question – is that cost being passed on back to us? Additionally, the main argument from many providers, according to Lanng, is that there is a cost to providing suppliers with this capability, however, the main cost, the cost of data, has continuously gone down but fees to submit eInvoices have gone up.
Whether or not you agree with Tradeshift, the network numbers that they report are significant and indicate that many share Christian’s view:
- 15 enterprise customers including NHS, Vestas Wind Systems, Kuehne & Nagel
- 160,000 active suppliers – defined as those that send invoices
- 547,000 suppliers in the process of being onboarded by customers
- Active in 193 countries
- 2.4MM employees on the Tradeshift network, 300,000 of which are enterprise users.
(Note: The figures above were reported by Tradeshift at the event. Ardent Partners has not validated these figures)
I think it’s safe to say that Tradeshift is not ‘just another start-up’ but a fast growing B2B network that is introducing much needed innovation to this segment.
Connecting Small Businesses to Large Ones – Intuit & Tradeshift
Eric Dunn has a very interesting role at Intuit; he is responsible for moving Intuit’s products from desktop solutions into the networked world. That said, a big, recent focus of his has been to create what he calls ‘frictionless commerce’ between Intuit’s main customer base, users of Intuit’s QuickBooks solutions (small businesses) and larger enterprises. According to Eric there were four major factors that convinced him to partner with Tradeshift:
- Compatible vision
- Modern technological design
- Clear market traction
- Impressive team
Just to provide some details around the opportunity for Tradeshift, let’s take a look at the numbers Eric shared around its very well known accounting product QuickBooks:
- Approx 5 million businesses use QuickBooks (4 million of which are US based) in 160 countries and 50 languages
- QuickBooks online – 430,000 subscribers and growing fast
- Approx 25 million employees of above businesses use QuickBooks
- An interesting piece of data shared from a study conducted by Intuit – 40% of businesses using QuickBooks that are over $1MM in revenue have received requests for eInvoicing.
When the two partners have successfully integrated their solutions, QuickBooks users will have the ability to enroll onto Tradeshift right from QuickBooks. If a QuickBooks customer has a customer on the Tradeshift network, they will be informed that they can now submit an eInvoice. Overall, the Intuit partnership is a huge deal for Tradeshift and it has the potential to grow the network considerably.
Needless to say that this was an exciting event from a provider that is pushing the boundaries and is beginning to gain significant traction. Read Part 2 here.
