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Supply Chain Risk

Coupa brings LLamasoft into the fold in $1.5 billion acquisition

San Mateo, Calif.-based business spend management (BSM) services provider Coupa announced this week it has acquired Ann Arbor-based AI (artificial intelligence)-powered supply chain design and planning services provider LLammasoft, for roughly $1.5 billion.

Coupa officials said that this deal will augment its supply chain capabilities and also enable its shipper customers to drive greater value through BPM processes. And they also noted that LLamasoft will help Coupa achieve that value, given the heightened need for supply chain volatility and changing market conditions, which it said necessitates the need for shippers to make smarter and faster supply chain decisions.

What’s more, they also observed that the pairing of Coupa’s $2 trillion in business spend and supplier data performance meshed with LLamasoft’s AI-powered supply chain analytics platform represents what it called a “powerful combination” that will “allow [shippers] to gain greater visibility into and control over direct spend,” adding that “the two companies can shorten the lead time between supply chain decision and execution by having all the data into one system.”

LLamasoft’s AI-driven supply chain design & planning technology is leading in its field, and is used by hundreds of companies around the world, including 43% of Fortune 100 companies, 23 of 25 Gartner Top Supply Chains and all Gartner Supply Chain Masters. With LLamasoft, companies are able to make smarter decisions faster, enhance supply chain agility, mitigate supply chain risks, and help companies spend as effectively as possible. All of these are CEO and board-level priorities and areas where direct spend can be improved and maximized for greater ROI.

Donna Wilczek, senior vice president of product strategy at Coupa, told LM that with this acquisition, Llamasoft is a company that is able to accelerate various challenges for customers.

“If there’s one thing that has become apparent this year, it is that supply chains need to constantly adapt to change, that risk has to be proactively managed, and that capital preservation is imperative,” she said. “With demand uncertainty on one hand, and supply volatility on the other, companies are in need of technology that can help them balance the constant trade-offs of service, profitability and risk to meet the changing demands of consumers amid an increasingly dynamic global business environment. These are conversations we have been having with customers around the globe.”

And she highlighted three areas in which LLamasoft is a great fit for Coupa and its customers, including:

  • Breaking down silos: LLamasoft helps customers break down the silos across departments within supply chain like product design, manufacturing, and distribution, just as Coupa helps customers break down silos across procurement, finance, legal, risk & compliance, and other groups involved in spend management. By bringing leading supply chain planning capabilities into the same platform as our Source-to-Pay and Treasury capabilities, a whole new level of collaboration and data sharing across departments and between companies and suppliers will become possible. For example, we envision a day where treasurers have real-time understanding of cash forecasting based on supply chain decisions;
  • Connecting the dots for greater visibility and control: Coupa’s nearly $2 trillion in business spend and supplier performance data together with LLamasoft’s AI-powered supply chain analytics platform is a powerful combination that will allow customers to design supply chain strategies to support specific business goals and gain greater visibility into and control over the direct and indirect spending related to achieving them; and
  • Driving value for customers: Both companies share a vision for driving tangible, measurable value for global companies. Together, she said they will deliver a more powerful Business Spend Management platform to help organizations everywhere maximize the value of every dollar they spend in a smarter, simpler, and safer way. Ultimately, Coupa plans to connect supply chain design and planning with the resulting execution aspects (i.e. sourcing optimization and cash flow optimization) to drive the effectiveness of every dollar a business spends

Regarding the next steps of this acquisition, in terms of integrating LLamasoft into Coupa, Wilczek said Coupa will rapidly unify LLamasoft within Coupa to deliver supply chain design and planning capabilities as an integral part of its comprehensive Business Spend Management platform.

“Over the coming weeks, our teams will be designing the go-forward organizational structure,” she said. “LLamasoft customers can expect to continue to receive the same levels of service and support that they have always gotten from the company,” she said. “We’re excited to welcome the LLamasoft customers to the Coupa family and look forward to engaging them around the future of Business Spend Management, from planning to procurement to payments.”

Razat Gaurav, CEO at LLamasoft, said in a statement that LLamasoft is very excited about joining forces with Coupa.

“Combining Coupa’s market-leading spend management execution core and broad market reach with LLamasoft’s AI-powered supply chain analytics provides a unique opportunity to bring together digital transformation solutions that drive decision making and operational efficiency across the enterprise,” he said. “I am equally excited for employees of both organizations who share a culture that prioritizes delivering innovation and exceptional customer value.”

The meshing of LLamasoft, a market leader in supply chain planning, and Coupa, a leader in procurement showcases the growing convergence between different areas of the supply chain technology sector, according to Ben Gordon, Managing Partner of Cambridge Capital, an investor in niche supply chain leaders and also Managing Partner of BGSA Holdings, a leading mergers and acquisitions advisory firm focused on the transportation, logistics, and supply chain technology sectors.

“I believe acquirors will be more and more aggressive about combining adjacent capabilities to give customers a more complete solution,” said Gordon.

About the Author

Jeff Berman, Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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