The research team at Ardent Partners recently met with Tradeshift in its San Francisco headquarters. CEO and Chairman, Christian Lanng led the discussion attended by Chief Strategy Officer, Sarika Garg, Chief Marketing Officer, David Ahrens and other members of the Tradeshift team. The meeting was an informal session that morphed into a larger pre-briefing ahead of some company announcements that are planned for later this spring.
Company Background
Christian Lanng, Mikkel Hippe Brun, and Gert Sylvest, founded Tradeshift in Denmark in 2009 but relocated it a few years later to San Francisco to be closer to the pulse of the North American market, to gain access to a larger and more accessible workforce, and to be located closer to potential investors. While Tradeshift originally started with a focus on eInvoicing and the development of a commerce network, its founders have always had a bold and expansive vision for the future of the company and its impact on B2B commerce. The company developed an organic Purchase-to-Pay (P2P) solution suite, as well as a business network/platform that enables transactions, communication, and interaction between trading partners. The network is an open platform that enables third-party providers to develop and offer their applications to organizations on the Tradeshift network. The company also acquired the IBX Business Network from CapGemini last year (click to read our analysis). Today, Tradeshift reports that it currently has 1.6 million suppliers enabled on its network and is adding roughly 15,000 new suppliers every month.
While the Tradeshift vision (and go-to-market) has evolved and shifted over the years, several principles remain bedrock:
- Enabling participation on a transaction platform or network should be as easy as joining any social network.
- B2B relationships and transactions are more valuable (and powerful) when trading partner communication and other relevant information is centrally located.
- Developing a platform/network that supports an ecosystem of third-party technology and service providers to offer value-added capabilities is a key differentiator.
Christian Lanng led the discussion that focused on the company’s three primary solutions Tradeshift Buy, Tradeshift Pay, and Tradeshift App.
Tradeshift Buy: The Marketplace is the Future
Whether viewing the company’s solutions or talking to its leadership team, it has always been clear that Tradeshift believes that the social elements that connect people in the online consumer world and in the social networks of their personal lives can offer great value in the B2B world as well. Christian says that Tradeshift has designed its buy side solutions to make business procurement work in a way that is very similar to how consumers buy goods and services at home every day, while adding in more control and compliance. The Tradeshift marketplace allows for customers to connect and manage their sellers all in one place. Users are able to set up profiles in a similar fashion to LinkedIn, with both public, and private information. The Tradeshift marketplace allows for customers to take control, manage the experience themselves, and also maintain all the data and everything that comes with it.
When Christian looks at the landscape today, he certainly sees the traditional rivals in the business network and P2P spaces, but he also believes that Amazon Business poses a very real threat to the entire supply management technology segment. The goal with Tradeshift Buy is to provide a private, consumerized marketplace for their customers, and become a leading, viable alternative to the Seattle-based eCommerce behemoth. One big factor that Christian believes will aid Tradeshift in its attempt to own a large piece of the global B2B pie is that suppliers and distributors will be hesitant to use Amazon, a direct (or potential) rival for many, as a conduit for sales.
Ada: The Conversation Bot
One of the new interesting features of the Tradeshift Marketplace is ‘Tradeshift Ada’, a conversation bot that uses natural language processing (NLP) technology to help facilitate B2B commerce. ‘Ada’ provides a ‘Siri-like technology’ designed to help users accelerate how they buy, pay, and collaborate. Ada works by learning from previous interactions to automate tasks, anticipate questions, and provide insights into organizational spend. Ada, which leverages machine-learning capabilities, is now integrated into all Tradeshift solutions with the goal of providing a better, faster, and easier user experience. For example, users are able to ask any type of relevant question, like “how much did we spend yesterday?” and the system can process the question, search and access the correct information and data, and present an answer back to the user.
Tradeshift Pay: More Than Just eInvoicing
Tradeshift was originally founded as an electronic invoicing network and invoice workflow, matching, collaboration, compliance, invoice scanning, financing, and payment capabilities are now all part of the comprehensive offering. Tradeshift Pay enables electronic invoicing and helps to ensure compliance with global trade regulations, while preventing inaccurate invoices from being submitted. AP teams can collaborate in real-time, (both internally and with suppliers) to drive process efficiencies. In addition, users can leverage the Tradeshift platform to create apps and on-the-fly business configurations that drive compliance and best practices.
Tradeshift’s payment and supply chain finance are newer offerings and we expect that they will be a major area of focus for the company going forward. To start, Tradeshift has developed an extensive partner network to support payments that includes many of the major Banks (like HSBC, Santander, Citi, and Barclays) as well as the main card companies (Visa, MasterCard, AMEX). Many of the partners also offer a broad array of supply chain finance options. Tradeshift Pay offers its users the ability to make their payments in a variety of ways using a variety of formats including cards and ACH. Tradeshift’s bank partners are attacking the market in different ways (some are using Tradeshift Pay as a Trojan Horse to gain access to their customers’ supply chain finance business, but Christian believes that the number of major bank partners (and their potential reach) is a significant differentiator in the market today. He also noted that the value he sees in a solution like Virtual Cards with dynamic, one-time use account numbers, will have a greater net impact on the market than something like dynamic discounting, which has not, as yet fulfilled its promise. Tradeshift is also able to generate real-time virtual cards because of their access to the AMEX API, something that users have been requesting.
Tradeshift App: A Strategy for Success
The Tradeshift platform is at the center of everything Tradeshift does. The company offers an open ecosystem that encourages third-party developers to add their own applications to the Tradeshift App store. Lanng argues that a solution provider does not have a true technology platform until it has an app store. Over the years, Tradeshift has partnered with many companies, and their app store now has a robust selection of solutions available for its customers. Being able to leverage more than 100 third party apps like Quyntess E-Logistics, C2FO, DocuSign, EcoVadis, and Netsuite ERP Connection Manager, provides a great value add to Tradeshift customers. New customers simply go the app store and select any combination of apps available based on the needs of their business. This includes everything from logistics to delivery, to the payments side and setting up a credit card merchant as well. Tradeshift’s original strategy was to provide as many apps as possible to participants on the platform. Today, Christian and his team have altered their strategy somewhat and are now more focused on ensuring that customers are driving as much value as possible from the apps they have.
Final Thoughts
From its earliest days, Tradeshift has had a larger than life vision regarding its role in the B2B marketplace (and the world). As with any relatively young company (Tradeshift is less than ten years old), there have been some shifts in emphasis and strategy. But, Tradeshift’s rise and the number of organizations leveraging the Tradeshift network continues to be impressive. The company offers a state-of-the-art, mobile-friendly, platform with highly usable features, more similar to a social network than most rivals, and its platform offers numerous applications to their network’s participants. Its vision to become the Amazon of B2B, while also providing a wealth of payment and supply chain financing options to everyone as well, is ambitious and aggressive. Nothing great comes easy; Christian and his leadership team appear ready and equipped to towards it.
Phil Bartolini also contributed to this article.
RELATED ARTICLES:
Instant Analysis: Tradeshift to Acquire IBX Business Network
Tradeshift Announces Partnership with Canon Business Process Services
Monday First Thing: Why Doesn’t AP Get The Recognition It Deserves?
Transforming Accounts Payables Requires a Holistic Approach
CPO Rising’s Hot Tech Prospect – Tradeshift
