On March 5th 2013, Tradeshift hosted one of its first public events in New York City. The event was hosted and led by CEO Christian Lanng and brought together industry analysts like myself and other journalists, bloggers, investors as well as a few customers. For those that do not know the company, Tradeshift is one of the newer players in the eInvoicing/B2B network space (it was launched in May 2010). Their business model and approach is slightly different from the norm and in many respects, the Tradeshift eInvoicing platform can be compared to that of a social network. I will share some of the highlights from the event and provide some details around Tradeshift’s platform and its new partnership with Intuit.
The Tradeshift Platform
In the eInvoice/B2B network market, 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 more like a MySpace or more like a Facebook of this space. Tradeshift is using new and innovative technologies and approaches in an attempt to break down age-old challenges around adoption and on-boarding. 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 smart phones, tablets, laptops or desktop and any operating system (i.e. Android, iOS, or Microsoft).
Intuit & Tradeshift
In early January 2013, Intuit announced a strategic partnership with Tradeshift. Intuit is the software company responsible for QuickBooks, one of the most widely used SMB accounting software products with approximately 5 million customers (read more on the announcement here). This partnership will provide access for millions of QuickBooks (“QB”) users to leverage Tradeshift and transact electronically with their trading partners. These users will be able to automate their largely manual business processes (e.g., submitting and receiving invoices and payments electronically) without having to make a huge investment. This partnership will also help Tradeshift’s larger enterprise clients begin to electronically transact with their SMB suppliers (the long-tail), many of which tend to fall outside of any eInvoicing initiatives.
Just to provide some details around the opportunity for Tradeshift, let’s take a look some QuickBooks numbers that Intuit shared at the event:
- Approx 5 million businesses use QuickBooks (4 million of which are US-based) in 160 countries and 50 languages
- QuickBooks online (cloud version) – 430,000 subscribers and growing fast
- Approx 25 million end-users in those 5 million businesses use QuickBooks
- Intuit says that 40% of businesses using QuickBooks that are over $1MM in revenue have received a request to begin eInvoicing with a trading partner
To accompany the partnership announcement, Tradeshift released a QuickBooks Connect App on its platform. Once installed, this App syncs QuickBooks with Tradeshift and allows QuickBooks users to transact with anyone on the Tradeshift network. The QB Connect app also lets users export Tradeshift invoices to QuickBooks Online and automatically update latest invoice details in their accounts. It also imports customer details from QuickBooks Online to Tradeshift invoices, eliminating the need to re-enter data.
Opening the Tradeshift platform to the QB user base gives Tradeshift the opportunity to develop a business network for SMBs, an area where most networks and supply management solution providers have failed to penetrate.
Another very different aspect about Tradeshift is its App framework, which is similar in concept to Facebook apps or Apple apps. The app marketplace, called Tradeshift Apps, is where users find, buy (some are free), and activate apps. Apps can offer a variety of features and add-ons for example, a map app called Cartobi allows users to view and analyze invoice data on a map, the PayPal Payment app allows for online payments to be collected and Recurring Invoices allows users to send Invoices automatically each month to certain suppliers. All apps have different pricing models, for example, the Paypal Payment app charges $0.50/transaction but Cartobi charges $15/month. All apps are designed to work within the Tradeshift network and once activated are ready for immediate use. There are approximately 30 apps available with about as many more in development.
Tradeshift is clearly innovative in its approach and has successfully created a new platform for trading partners to conduct business and this market has plenty of potential for continued growth. But Tradeshift’s success is not a slam dunk, it will face a big challenge in the large enterprise market where many will prefer Procure-to-Pay (“P2P”) suites and ultimately work with network providers like Ariba and Hubwoo. It will be interesting to see how the Tradeshift platform continues to develop and whether or not an existing supply managment solution provider creates its own Tradeshift App. But, one thing is clear, Tradeshift is a newcomer, no more.