One SaaS brand has consumed another as Workday picks up Scout RFP in an all-cash transaction.
Workday, a SaaS brand known for its enterprise cloud applications for finance and HR, has signed an agreement to acquire Scout RFP in an all-cash transaction
The deal will cost Workday about $540m, subject to adjustments, and is expected to be closed in early 2020.
“Scout RFP is an industry leader that is loved by procurement teams who are undergoing a significant shift to better optimise spend,” said Aneel Bhusri, co-founder and CEO of Workday.
“Together, we will deliver a modern source-to-pay solution that accelerates our momentum in the spend management market and expands how customers can plan, execute, analyse and extend in one system.”
What is Scout RFP?
Founded in 2013, Scout RFP streamlines procurement processes with a cloud-based automated sourcing and auction platform. Used by more than 240 brands worldwide, the company claims to manage more than $38.5bn in project spend and its goal is to make enterprise commerce faster and more transparent with lower risk.
Headquartered in San Francisco, Scout RFP has received backing from Workday Ventures, the strategic investment arm of Workday, as well as Google Ventures and Salesforce Ventures.
Matt Murphy of Menlo Ventures, which led the company’s $15.5m Series B round in 2017, called Scout RFP one of the “crown jewels” of the firm’s portfolio following news of the acquisition.
The RFP in the company’s name refers to ‘request for a proposal’, which is a regular part of the procurement process.
“It’s amazing how many large markets still rely on antiquated, often analog workflows. The lack of purpose-built modern software creates an opportunity for scrappy founders to create efficiencies. In the case of Scout, e-sourcing was dominated by a basket of general tools cobbled together, a disjointed process that might involve email, Word docs and Excel,” Murphy explained.
“The Scout team dug in deep to understand the buyer’s needs and the workflow, creating a custom application that simplified the process and offered intelligence only SaaS products can provide, like supplier quality ratings across vendors. As a result, their business thrived.”
Workday already has its own services – Workday Procurement and Workday Inventory – that help with streamlining the procurement process for more than 650 customers.
The addition of Scout RFP’s technology to the fold will accelerate these efforts and further improve how the platform supports customers’ strategic supplier relationships.
Working together, Workday and Scout RFP intend to provide organisations with a comprehensive source-to-pay solution to enable better outcomes such as reduced spend and greater policy compliance.
Scout RFP CEO Alex Yakubovich praised the Workday team, culture, product and customer focus in his statement following the announcement. “In addition to our common passion for innovative technologies, our two companies also share a commitment to employee and customer satisfaction, which will enable us to advance our vision to transform strategic sourcing,” he said.