The combined Certify and Chrome River still pales in scope when compared to global behemoth SAP Concur. The approach of offering a variety of different services instead of a single platform, though, has potential in a fragmented global market for expense software services.
Expense software providers Certify and Chrome River have merged, continuing a period of consolidation in the expense management space. The two companies will be housed together in a new holding company that will be valued at more than $1 billion.
The mastermind is California-based private equity group K1 Investment Management, which rolled up Certify with several other expense software providers like Tallie and Nexonia in mid- 2017 through a $125 million investment. The roll-up was followed by Certify’s acquisition of NuTravel a few months later, bringing integrated travel and expense to its platform.
The combined Certify and Chrome River is taking the opposite approach to sector leader SAP Concur, which offers integrated travel and expense, along with other software-as-a-service providers like Expensify. Different types of companies need different solutions, and the plan is to offer whatever a company could need through a variety of different products and brands.
“Our single largest competitor in the space is Concur; Concur has embraced this one-size-fits-all strategy where whether you’re 50 employees or 50,000 employees, you get the same software,” said Bob Neveu, CEO of Certify. “We just fundamentally believe that isn’t what the market is actually looking for and expecting.”
The combined Certify and Chrome River will have 11,000 global customers. To put things in perspective, SAP Concur serves more than 48,000 global companies comprising 75 percent of Fortune 100 and 500 companies.
Chrome River’s differentiator is giving accountants and travel folks more robust insights into spending patterns and travel behavior. It will bring larger customers into the combined organization’s client list and allow both companies to be more nimble as they plot a future together.
“We can create a solution for different customers and different products,” said Alan Rich, CEO of Chrome River. “Clearly there are advantages to scale. We’ll be 800 people in our company, well over $100 million in revenue. With our scale comes things we couldn’t do in the market as independent companies.”
Neveu and Rich both say the conversation is ongoing surrounding how the two companies will pool resources and work together going forward. Rich expects increased funding from K1 will help the combined company continue to grow, both organically and inorganically.
Concur may have conquered the travel and expense market for the biggest companies in the world, but there is space for companies like a souped-up Certify to bring compelling products to everyone else,
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Photo credit: An image of a meeting in a conference room at Certify's headquarters. Certify