SAP is planning to acquire a majority stake of Taulia, a leading provider of working capital management solutions. The move is aimed at giving companies better access to liquidity and improving their cash flows.
Both companies did not disclose the financial details of the transaction.
The acquisition further expands SAP’s Business Network and strengthens its solutions for the CFO office. Taulia will operate as an independent company with its own brand in the SAP Group, and Cédric Bru will remain CEO of Taulia. SAP CFO Luka Mucic will become Chairman of the Board.
SAP also released its fourth quarter results on Thursday, with record cloud performance. Reporting tremendous growth of SAP S/4HANA cloud driven by ‘RISE with SAP’, it is targeting up to 26% cloud revenue growth at constant currencies in 2022.
Taulia offers early payment through supply chain finance, dynamic discounting and accounts receivable finance. Challenging economic conditions and disruptions in supply chains have significantly increased demand for early payment and the market for working capital management has seen strong growth. Taulia is recognised for its leading technology and has one of the broadest platform and solution portfolios in the working capital management market. The company has also built a strong ecosystem of financial partners who provide the necessary funding, including JP Morgan, UniCredit and other high-profile banks.
“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,” SAP CFO Luka Mucic said.
“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.”
Taulia has been an important SAP partner with proven integration into their solutions. More than 80 per cent of their customer base run an SAP ERP system; Airbus, Nissan and AstraZeneca are among the joint customers. SAP will strengthen the integration with Taulia, both for the SAP Business Network and the CFO solution suite, to become the core of its working capital management portfolio.
Taulia’s solutions will also be available standalone so that non-SAP customers can continue to benefit from its portfolio.
“I am delighted by our combination with SAP and its ecosystem to serve more businesses,” Cédric Bru, Taulia CEO said. “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.”
Leading banks as strategic partners
While SAP is acquiring a controlling majority of Taulia, JP Morgan’s relationship with Taulia remains unchanged, and the bank will continue to operate their strategic alliance as well as maintain its equity stake in the fintech.
“This news is very exciting for both Taulia, our successful strategic alliance partner, and SAP as the new majority owner,” said Stuart Roberts, Global Head of Trade & Working Capital, JP Morgan. “With SAP, we expect the strategic alliance between JP 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.”
SAP will invite additional financial institutions to run their clients’ working capital management business on the platform. The setup as an independent company will provide flexibility to invite further strategic banking partners to also become equity partners in Taulia with SAP remaining the long-term majority owner.
The move also benefits the SAP ecosystem: As suppliers, SAP customers can improve their liquidity through early payment options with predictable off-balance sheet funding. As buyers, they can make full use of payment terms while strengthening their relationship with suppliers.
Funders, such as banks, can pursue attractive investment opportunities in short-term financing of large credit-worthy businesses. SAP intends to embed a growing range of financial services for banks and insurance companies into its solutions and platforms.
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