Olivier Novasque, CEO of Sidetrade commented:
Q2 2023 was a standout quarter for Sidetrade, with record bookings, both in SaaS subscriptions and services. Outstanding figures aside, the strategic decisions made over recent years are now paying off for Sidetrade. First and foremost, on the back of substantial AI investment over the last five years and the creation of the world’s first-ever Data Lake of B2B payment transactions which powers our algorithms, we have an undeniable technological edge that is hard to catch up with, and which is highly appreciated by major customers.
What’s more, our North American expansion, with some fifty new hires in the last two years, has played a successful role in accelerating our growth. In addition to direct bookings for this region, our support for multinationals on both sides of the Atlantic in deploying their Order-to-Cash solutions worldwide makes us a credible provider to large corporations on an unprecedented scale. Our foothold in the United States was key to the success behind the three global contracts we signed over the quarter with Europe-based multinationals. Quarter after quarter, Sidetrade continually demonstrates its ability to become the world leader in the fast-growing and rapidly globalizing Order-to-Cash market.
Record quarter with more than €4 million in new Annual Contract Value
| Sidetrade (m€) |
Q2 2023 | Q2 2022 | Variation |
| New SaaS subscriptions (New ARR) | 2.4 | 0.9 | +178% |
| Services bookings | 1.7 | 0.7 | +133% |
| New Annual Contract Value (ACV) | 4.1 | 1.6 | +158% |
2023 information is from consolidated, unaudited data.
In SaaS bookings, Sidetrade delivered the best quarterly performance in its history with a profit of €2.41 million in New Annual Recurring Revenue (“new ARR”), up 178% versus Q2 2022 (€0.87 million).
SaaS bookings are supplemented by €1.68 million of additional services (implementation, configuration, training, recurring services, etc.) which are generally invoiced within twelve months of their signing, representing a +133% increase compared to Q2 2022 (€0.72 million).
As a result, the Annual Contract Value (“ACV”) of new bookings in Q2 2023 was €4.1 million versus €1.6 million in Q2 2022; a +158% increase.
In Q2 2023, the initial contract period for new customers (excluding renewals) rose to 44.9 months, which attests to new customers’ confidence in Sidetrade. This extended contract period also increases the economic model’s strong predictability.
Ramp-up in new global contracts
Q2 2023 saw Sidetrade raise its international profile by signing global contracts with Bayer AG, BIC and Dassault Systèmes. Combined with its technological edge in AI, Sidetrade’s presence on both sides of the Atlantic was key to winning all three tenders. These multinationals conduct a large part of their business in the US and Europe, with separate finance departments operating simultaneously on both continents.
Sidetrade’s ability to align its seasoned, regional salesforces in each region to the customer’s local teams, while coordinating discussions with purchasing at group level, played a decisive role in these successes.
In addition, Sidetrade further cemented its position following Gartner’s recognition of the Company for the second year in a row as one of the global leaders in the Magic Quadrant for Integrated Invoice-to-Cash applications (see press release of May 8, 2023).
On top of these three major contracts, the Group signed new contracts in France and abroad with companies including Border States (United States), Bunzl (US extension), Norauto (France), UGI (Eastern Europe, five countries), Underwriters Laboratories (United States) and Veolia North America (United States).
Introducing CashApp, an AI-based solution to revolutionize incoming payments
Part of Sidetrade’s resounding success in Q2 is due to the sale of its newly launched product, CashApp. Fully integrated into Sidetrade’s Order-to-Cash platform, CashApp automates the reconciliation of customers’ banked payments with open invoices. Leveraging the capabilities of Sidetrade’s machine learning and deep learning algorithms, all relevant data retrieved from incoming documentation – e.g., copies of checks and remittance which often accompanies completed payments – is used to expedite this correspondence. Sidetrade’s cash application automates the allocation of customer payment notices to open invoices in over 90% of cases, avoiding the need for manual processes.
Harnessing the latest AI technologies, this new module has started to garner attention from major players. Bayer, for example, opted to deploy Sidetrade’s CashApp solution worldwide, despite already using cash application technology. Conversely, BIC specifically selected CashApp for its Europe and US teams.
Overall, in Q2 2023, bookings by new customers (“New Business“) accounted for 62% of the total new bookings. Cross-selling represented 17% of total new bookings, with the remaining 21% of bookings driven by Upselling of additional modules to existing customers.
The global contracts have also notably impacted the average amount for new contracts (excluding Upselling). In Q2 2023, the average totaled €231,000 per year of subscription (“ARR”) versus €106,000 per year of subscription in Q2 2022.
Robust growth in revenue, up 17% overall, with SaaS subscriptions up 22%
| Sidetrade (m€) |
Q2 2023 | Q2 2022 | Variation |
| ‘Order-to-Cash’ activities | 10.9 | 9.2 | +18% |
| of which SaaS subscriptions | 9.3 | 7.6 | +22% |
| ‘Sales & Marketing’ activities | 0.2 | 0.3 | -27% |
| Revenue | 11.1 | 9.5 | +17% |
2023 information is from consolidated, unaudited data.
In Q2 2023, ‘Order-to-Cash’ activities, which are a core pillar of the Company’s strategy (98% of total revenue) were up 18%, while SaaS subscriptions increased by 22%. As part of the Company’s strategy, ‘Sales & Marketing’ activities continued to decline in subscription terms, accounting for only €0.2 million in Q2 2023, i.e., 2% of total revenue. As a result, their impact on total growth will diminish further in the quarters ahead.
Revenue for Q2 2023 topped the €10 million mark for the first time in a quarter, totaling €11.1 million, an increase of 17% compared to the same period in the previous fiscal year. This growth is attributable to two factors:
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Surge in revenue in the United States, up 37%
In Q2 2023, Sidetrade’s revenue was underpinned by growth in international markets, which now represent 58% of total revenue, including 28% in North America. Sidetrade’s international expansion strategy is yielding impressive results, particularly in the United States where revenues surged by 37%. As such, the United States is now a robust growth driver for Sidetrade.
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Impressive growth in subscriptions with multinational corporations, up 35%
When analyzing customer profiles for ‘Order-to-Cash’ activities, the share of subscriptions with multinational corporations on annual subscription contracts in excess of €250,000, recorded impressive growth of 35% in Q2 2023. This market segment now accounts for 41% of Sidetrade’s total subscriptions and is expected to remain an important growth driver in the months ahead.
On the back of its performance in the first two quarters of 2023, the Group’s management is confident in Sidetrade’s ability to deliver double-digit growth in the 2023 fiscal year.
Two years on from the Amalto takeover, Sidetrade gains a stronger foothold in North America with the acquisition of CreditPoint Software activities.
Olivier Novasque, CEO of Sidetrade, said: By acquiring CreditPoint Software, Sidetrade has undoubtedly enhanced its solution for B2B credit risk management and we are in pole position to take advantage of the boom in B2B e-commerce. After placing artificial intelligence at the core of our Collection, Disputes and CashApps solutions, we are now shaping the future of B2B credit risk management together with CreditPoint Software’s teams as we build on the analysis from our Data Lake of over $4.6 billion worth of B2B transactions. Our technological advantage in AI over our competitors will only continue to assert itself and become even more evident. Working in tandem, the talents and technologies of both groups will enable Sidetrade to cement its global leadership position in Order-to-Cash.
Introducing CreditPoint Software and its state-of-the-art platform for instant credit risk management
Founded in 2006 in the city of Tulsa, Oklahoma, CreditPoint Software is an American software company specializing in comprehensive B2B credit risk management solutions.
Following a decade of substantial R&D investment, CreditPoint Software has developed one of the world-leading cloud-based platforms that leverages real time connection and monitoring for over 20 credit rating agencies worldwide including Dun & BradstreetTM, CreditsafeTM, ExperianTM, EquifaxTM, TransUnionTM as well as S&P and MoodysTM. By standardizing external data from multiple sources within a single repository, CreditPoint Software makes it possible for companies to combine this information with their internal financial and customer data on credit risk exposure. This enables Credit Management teams to automate and streamline decision-making, thanks to the platform’s unlimited configuration options, resulting in the ability to auto decide up to 100% of initial, increase and renewal decisions. The CreditPoint suite of products also includes highly configurable personalized credit application templates.
Supported by customizable business rules and data points, the decision engine within CreditPoint Software secures compliance with internal credit delegations based on delegation of authority. CreditPoint Software also schedules regular reviews of current credit limits for existing clientele, while providing the option for sales teams and organizations to be made aware of credit availability so they may potentially generate additional sales. The end result: selling more to the best customers and pricing risk into the customers that may not be as healthy financially as others.
What’s more, CreditPoint Software’s “Onboarding Credit Application” facilitates the initial process for customers to apply for a credit line, irrespective of whether the B2B purchasing experience is delivered offline or online. In an increasingly digitalized landscape, where digital transformation is key, providing real-time credit approval during the onboarding process of new customers becomes an essential competitive advantage for all businesses.
To date, CreditPoint Software has an active portfolio of around 30 customers in North America and serves multinationals such as Nutrien, BP, Edelman and Caterpillar.
In the fiscal year 2023, CreditPoint Software expects to break even, with revenue topping the $2 million mark.
John C. Powers, CEO of CreditPoint Software, commented:
This deal with Sidetrade is a major step forward in our commitment to providing leading-edge solutions for B2B credit risk management. In today’s uncertain economic environment, companies seek efficient solutions that anticipate risks and automate decisions to secure and increase their revenue streams. By leveraging Sidetrade’s Data Lake with its predictive payment intelligence map of 21 million companies worldwide, we will deploy artificial intelligence in all our decisioning to provide companies with the risk management solution of the future. Propelled by Sidetrade’s sales force and implementation resources, we will further expand this new offering throughout the United States and bring it to the European market for the first time.
Contextualizing CreditPoint Software, the solution designed for the B2B e-commerce boom
While McKinsey & Company estimated that the majority of B2B corporations had next to no e-commerce capabilities at the start of the pandemic, the past two years have seen a rapid trend reversal. In its 2021 B2B Pulse Report, the US consulting firm found that 65% of B2B companies across all sectors offer e-commerce capabilities.
A DHL study also reported that by 2025, 80% of all B2B sales interactions between suppliers and professional buyers will take place digitally, representing a giant and unprecedented leap forward. And in its 2022 report, Statista expects total B2B e-commerce purchases to exceed $4.6 trillion in 2025. Clearly, e-commerce is no longer just a trendy new channel for B2B companies to discover, but instead an essential effective and strategic sales tool.
Compared to B2C e-commerce, B2B e-commerce places more importance on credit and payment terms. A series of checks must be performed in real time to validate an order. However, managing such procedures instantly requires a step-by-step process. The latter involves identifying the company, integrating external financial data, decision-making and delegating approval based on the total order amount.
Nevertheless, across the globe, very few companies can implement a solution to overcome the limitations of B2B e-commerce and offer a customer experience to match the B2C shopping experience.
The boom in e-commerce has revolutionized sales and consumption patterns. In B2B, the growth of e-commerce requires companies to find the right solution for the right emerging expectation. You need to determine an acceptable payment delay to minimize risk and instantly maximize sales. commented Olivier Novasque, CEO of Sidetrade. For B2B companies that want to continue leading the way in their sectors, e-commerce is no longer just a nice to have, but an essential requirement. We will support them by utilizing our teams and the technology of CreditPoint Software. No matter the sector, it is a pressing need.
Focusing on the accretive acquisition of CreditPoint Software asset
This acquisition will be made in cash for an estimated €3 million and paid in part on the signing of the agreement with the rest scheduled for end-2023, which is subject to certain customer renewals. The amount includes an earn out based on the sales achieved by Sidetrade for CreditPoint Software’s solution over the next three years.
Sidetrade is financing the transaction through its cash position, which totaled €36 million (€12 million in treasury shares) as of June 30, 2023.
The transaction is part of the Group’s Fusion 100 strategic plan which targets Annual Recurring Revenue (“ARR”) of $100 million by end-2025. Not only is it a catalyst for Sidetrade’s product strategy, but also its target revenue for North America of close to $14 million in 2023 which will bolster the Group’s presence in the United States.
Criteo (NASDAQ: CRTO), the global technology company that enables marketers and media owners to drive better commerce outcomes, has selected Sidetrade to streamline and optimize its Order- to-Cash processes.
As the advertising and technology industries continue to evolve, it’s crucial that we’re adapting to these changes to ensure that our clients are constantly front of mind. We’re pleased to be supported by Sidetrade as we look to optimize the effectiveness of our global standard processes, accelerate cash flow and deliver a positive client experience, stated Petrie Terblanche, SVP Finance Shared Services of Criteo.
The decision to appoint Sidetrade was based on the strength of its technology and the quality of its team, particularly its agility on business requirements and project methodology, which fits together very well with Criteo ́s processes.
Sidetrade’s AI technology analyzes billions of B2B transactions daily, enabling businesses to tap into the power of automation and focus on driving productivity and building customer relationships. With Sidetrade recommending the best dunning strategies and providing automatable actions, Criteo can anticipate payment behavior and customer risk. This allows for faster decision-making, globally standardized systems, productivity, full KPI visibility and cash flow generation.
Jean-Claude Charpenet, VP Sales Europe at Sidetrade, commented: We are thrilled to welcome Criteo as the newest Sidetrade customer and to support its business growth in an ever-evolving market. Next-generation artificial intelligence technology is a core part of our foundation; an ethos shared by Criteo. We believe our technology and teams will be a great asset to Criteo in helping them meet their business goals, accelerate cash flow generation and improve efficiency.
Criteo joins more than 120 international players in the ICT sector who already rely on Sidetrade to simplify customer payments and provide continuous improvements to their Order-to-Cash efficiency.
A Global Fortune 500 agrochemical and pharmaceutical giant has kick-started a strategic global IT program. One of the objectives is to streamline Contract-to-Cash processes by implementing cutting-edge technologies.
Against this background, the company issued a worldwide request for proposal to select the best-in-class automated Cash Application leveraging AI and machine learning algorithms to allocate customer incoming payments against open items. The company, strongly committed to innovation, involved its Finance and IT departments in a rigorous global selection process. The company eventually selected Sidetrade’s CashApps solution on an initial five-year contract, to equip its entities across the globe.
Over a hundred people in multiple shared service centers worldwide will benefit from Sidetrade by enhancing their performance and increasing their visibility in the allocation of millions of customer invoices with banked payments. CashApps solution is designed to automate the allocation of invoices which were previously managed manually or using alternative market solutions. Thanks to its machine learning algorithms, the CashApps solution will be able to allocate customer payment notices to open invoices, offering automated allocation in over 90% of cases.
Olivier Novasque, CEO of Sidetrade, commented: We are extremely proud to have been chosen by this life sciences leader for two major reasons. Number one, our technological edge in machine learning applied to CashApps solution was a decisive selection criterion demonstrating the effectiveness of our artificial intelligence in automating the reconciliation of customer payment with their invoices. Number two is our end-to-end Order-to-Cash platform which could play a key role in digitizing the financial relationship with their customers. We are confident in our platform’s ability to significantly optimize the financial transactions of this world-leading company. Being selected by a major player in the life sciences sector in a global tender is a tremendous recognition of the value of Sidetrade, its technology and its teams.
This German multinational joins an extensive group of life sciences companies that already entrust Sidetrade with the continuous improvement of their Order-to-Cash processes.