SAP Expands Working Capital Management Portfolio With Acquisition

SAP’s purchase of a majority stake in Taulia comes as the application development giant announces 28 percent cloud revenue growth in its recently completed fourth quarter.

SAP has struck a deal to acquire a majority stake in Taulia, a supplier of working capital management applications and services, in a move to expand SAP’s Business Network portfolio and strengthen its offerings for the CFO office.

Taulia, based in San Francisco, will continue to operate as an independent company with its own brand within the SAP Group. Cedric Bru will continue as Taulia CEO while SAP CFO Luka Mucic will join Taulia’s board.

Terms of the acquisition were not disclosed. J.P. Morgan will retain a minority equity stake it holds in Taulia and will continue a strategic alliance with the company.

[Related: Google Cloud Now A ‘Rise With SAP’ Strategic Cloud Partner]

News of the Taulia deal came as application giant SAP reported that sales grew 6 percent the company’s fourth quarter, ended Dec. 31, 2021. Those gains were fueled by double-digit growth in cloud revenue and early success with the company’s Rise with SAP business transformation and cloud migration software and services that was announced one year ago.

“For a perfect quarter, every solution needs to go. And that’s indeed what happened with double-digit revenue and cloud backlog growth across all our major product categories,” CEO Christian Klein said in a call Thursday with financial analysts.

“This performance sets us up well for 2022. We expect continued acceleration of cloud revenue, with up to 26% growth reflected in our guidance. These are very strong results during a challenging time for most businesses. They demonstrate the confidence our customers have in SAP and in the unique value we offer in helping them address an unprecedented set of challenges,” Klein said.

Taulia’s working capital management solutions and services help businesses manage their cash flow, improve liquidity, and gain better visibility into invoices and payments. The services offer electronic invoicing, accounts receivable finance and dynamic discounting capabilities, helping buyers and suppliers “accelerate payments, improve supply chain health and unlock trapped cash,” according to the company.

“Taulia strengthens our portfolio and adds value to a point that is key to every company: financial flexibility and stability. With that, they contribute to making supply chains more resilient,” Mucic said in a statement. “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.”

Taulia is already an SAP partner with its solutions integrated with SAP software. More than 80 percent of the Taulia customer base operates on SAP ERP applications with Airbus, Nissan and AstraZenaca among their joint customers, according to SAP.

SAP said it will “strengthen the integration” between its own applications and Taulia, both for the SAP Business Network and CFO solution suite, “to become the core of SAP’s working capital management portfolio. SAP said it will continue to offer Taulia’s solutions on a standalone basis for non-SAP customers.

For the fiscal 2021 fourth quarter (ended Dec. 31, 2021) SAP reported revenue of 7.98 billion euro (U.S. $8.89 billion), up 6 percent from 7.54 billion euro (U.S. $8.40 billion) in the fourth quarter of fiscal 2020. The company, however, reported a 25 percent drop in profit for the fourth quarter to 1.45 billion euro (U.S. $1.61 billion) from 1.93 billion euro (U.S. $2.16 billion) one year earlier.

Cloud revenue in the fourth quarter was 2.61 billion euro (U.S. $2.91 billion), up 28 percent year over year, SAP reported. Some 1,300 SAP S/4HANA customers were added in the quarter, about half of which were net-new customers, bringing the total S/4HANA customer base to more than 18,800.

The company closed Rise with SAP deals with 650 customers in the fourth quarter, bringing the total to 1,300 including Mahindra & Mahindra, CVS, Panasonic and Siemens. SAP said Rise with SAP was a major sales driver for S/4HANA Cloud during the quarter.

“Clearly, RISE is a blockbuster success in the market. And we are just getting started,” Klein said on the earnings call. “Our massive on-premises installed base of more than 30,000 ERP customers presents a significant opportunity for our RISE with SAP offering as these customers begin their transformation to the cloud. At the same time, RISE attracts many new customers.”

For all of fiscal 2021 (ended Dec. 31, 2021) SAP revenue of 27.84 billion euro (U.S. $31.03 billion), up 2 percent from 27.34 billion euro (U.S. $30.47 billion) in fiscal 2020. Profit for the year was 5.38 billion euro (U.S. $6.00 billion) up 2 percent from 5.28 billion euro (U.S. $5.89 billion) one year before.