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.
Eqiom is a major player in the building materials sector and has selected Sidetrade to complete the digital transformation of its Order-to-Cash processes. Eqiom is established in France and Luxembourg.
Thanks to Sidetrade, this subsidiary of the Irish group CRH (Cement Roadstone Holdings) will benefit from real time analysis of its business activities, enabling its sales and finance teams to make more informed decisions and improve the quality of their customer relations. Sidetrade’s artificial intelligence, Aimie, also provides recommendations based on a daily analysis of billions of inter-company transactions. These recommendations help Eqiom to anticipate payment behavior and assess customer risk, so it can deploy the best dunning strategies.
Accelerating and securing cash flow is crucial in today’s uncertain economic climate, where late payment and non-payment can lead to a difficult situation for companies. says Pascal Hildwein, CFO of Eqiom. By choosing Sidetrade and its AI technology, we are strengthening our digital leadership with immediate benefits in terms of instilling cash culture among our staff.
Sidetrade’s AI also intelligently automates Order-to-Cash processes, improving productivity and cash flow generation. This enables Eqiom to focus on higher value-added activities, while keeping its operations running smoothly.
Sidetrade is delighted to partner with with Eqiom and is committed to providing innovative solutions to support the company’s digital transformation. We are proud to support Eqiom in its transition to a more efficient digital process, says Jean-Claude Charpenet, VP Sales Europe at Sidetrade. We are convinced that our expertise in data analysis and artificial intelligence will make Eqiom even more competitive in the market.
Eqiom joins a number of international construction players who already rely on Sidetrade to simplify customer payments and continuously increase their Order-to-Cash efficiency.
Olivier Novasque, CEO of Sidetrade commented :
We kick-started 2023 with vigorous growth in our subscriptions, which were up 21% in the first quarter, reflecting continued momentum on the back of a successful 2022. This trajectory highlights the enormous potential of Sidetrade in the years ahead. On the one hand, our initial steps in the United States – which are already proving to be a robust growth driver – have exceeded expectations. On the other, our presence on both sides of the Atlantic, combined with our technological edge in Artificial Intelligence, enables us to increasingly achieve major successes with multinational corporations.
Sidetrade is scaling up and becoming a global-leading player in its industry. At a time when Gartner has recognized Sidetrade as a Leader in its Magic Quadrant for the second year in a row, we expect to sustain a double-digit growth trajectory throughout 2023 and beyond, while maintaining strong profitability, which forms the cornerstone of our balanced development model.
Bookings, in line, with nearly €1 million in new Annual Recurring Revenue
In Q1 2023, new Annual Recurring Revenue (“ARR”) for Sidetrade totaled €0.89 million. This figure is in line with the usual level of quarterly bookings, of around €1 million in new ARR (excluding exceptional records). As expected, bookings were down year-on-year, which were significantly boosted when Sidetrade signed the largest contract in its history (see press release of February 21 2022). This contract alone accounted for €1.36 million, representing 62% of the total €2.17 million posted in Q1 2022. Restated for this exceptional base effect, the level of bookings in new ARR increased by 10% (€0.89 million versus €0.81 million).
SaaS bookings are supplemented by €0.94 million of additional services on an annual basis (implementation, configuration, training, recurring services, etc.) compared with €1.09 million in Q1 2022, which also benefited from €0.3 million related to this exceptional contract. As a result, the Annual Contract Value (“ACV”) of new bookings in Q1 2023 was €1.83 million.
The initial contract period for new customers (excluding renewals) extended to 48 months, compared with 40.8 months in the same quarter of the previous fiscal year.
Sidetrade continued to increase international orders in Q1 2023, achieving more than 25% of bookings in the United States.
Accelerated growth in revenue, up 17%, with +21% from SaaS subscriptions
| Sidetrade (€m) |
Q1 2023 | Q1 2022 | Variation |
| ‘Order-to-Cash’ Activities | 9.6 | 8.1 | +19% |
| of which SaaS Subscriptions | 8.0 | 6.7 | +21% |
| ‘Sales & Marketing’ Activities | 0.2 | 0.3 | -29% |
| Revenue | 9.8 | 8.4 | +17% |
2023 information is from consolidated, unaudited data..
In Q1 2023, ‘Order-to-Cash’ activities, which are a core business of the Company’s strategy (98% of total revenue), were up 19%, while SaaS subscriptions increased by 21%. As part of the Company’s strategy, ‘Sales & Marketing’ activities continued to decline in subscription terms, accounting for only €0.2 million in Q1 2023, i.e. 2% of total revenue. As a result, their impact on total growth will diminish in the quarters ahead.
Revenue for Q1 2023 totaled €9.8 million, representing an increase of 17% compared to the same period in the previous fiscal year which confirms Sidetrade’s solid start to the year. This accelerated growth is attributable to two factors:
Surge in activities in the United States, up 58%
In Q1 2023, Sidetrade’s revenue was underpinned by growth in international markets, which now represent 55% of total revenue, including 26% in North America. Sidetrade’s international expansion strategy is producing the desired results, particularly in the United States where revenues surged 58%. As such, the United States is now a robust growth driver for Sidetrade.
Impressive growth with multinational corporations, up 60%
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 more than 60% in Q1 2023.
Sidetrade’s presence in Europe and North America, combined with its technological edge in Artificial Intelligence, has enabled the Company to achieve multiple commercial successes with multinational companies that seek to deploy an ‘Order-to-Cash’ solution on a global scale. This market segment accounts for 43% of Sidetrade’s total subscriptions and is expected to remain an important growth driver in the months ahead.
Quarter after quarter, Sidetrade stands out as a global leader in the Order-to-Cash segment. Sidetrade was recently recognized as a Leader in the Gartner latest Magic Quadrant for Integrated Invoice-to-Cash Applications (see press release of May 8 2023), demonstrating the relevance of the Company’s solution which meets the needs of customers the world over.
With its business model based on 90% recurring revenue, Sidetrade is strongly positioned to address economic uncertainties with resilience. It should also be noted that all Sidetrade subscription contracts, including new contracts, provide an annual automatic price re-indexation clause based on the Consumer Price Index (CPI) for the relevant country. To that end, the Company’s pricing power protects its future revenue against inflationary pressures.