Four expense management software vendors—Certify, Nexonia, ExpenseWatch and Tallie—are merging into one company, after an investment firm, K1 Investment Management, said it is investing $125 million in an effort to challenge SAP’s Concur for dominance of the market.
K1 announced the deal Wednesday, saying the merged company will serve more than 7,500 customers of all sizes.
“We are thrilled to work with management to bring expanded functionality to the market as a result of this strategic combination," said K1 managing partner Hasan Askari in a statement. “Our commitment is to build the best-in-class travel, time and expense management software company and we intend to do that by continuing to invest in our brands, customers and people.”
The combination will position the four vendors to compete against Concur. The German business software giant SAP acquired Concur for $8.3 billion in 2015.
SAP's Concur team feel they are in a strong position. "As a company with more than 36,000 customers in more than 150 countries, our clients are our north star and only Concur enables you to integrate your travel and expense ecosystem to manage today’s corporate travel challenges," said a statement emailed to Accounting Today by an SAP spokesperson. "T&E is the second largest controllable expense, behind payroll, and businesses are embracing solutions that help them achieve cost savings and improve budget forecasting. The T&E market is projected to reach $2.5B by 2020 and Concur was named the “unquestionable leader”
The newly combined rival feel they are ready to challenge Concur. “This is a unique opportunity to unite four complementary market leaders to advance the way that companies manage their travel, time and expenses,” said Nexonia and Tallie president Eric White in a statement. “By integrating best-of-breed expense solutions and combining industry-leading expertise, Certify, Nexonia, ExpenseWatch and Tallie are incredibly well-positioned to bring a highly adaptive platform to the rapidly expanding expense management market.”
The market for travel and expense management software is expected to reach $2.46 billion by 2020, according to the technology research firm IDC.
“This deal is all about bringing the best expense management products to the most users everywhere in the world,” said Certify CEO Robert Neveu. “We’re now in a much stronger position to develop products and serve customers in the U.S., Canada and internationally. I would expect us to continue growing organically and through acquisition as we move to overtake Concur as the world's largest expense management software vendor.”
Certify has been growing 50 percent annually, according to K1.
The combined business will have a number of major customers using its T&E software, including 1-800-Flowers, FitBit, Survey Monkey, Century 21, Little Caesars and Scribd. All four of the combined companies will maintain their current operations in Portland, Maine; Toronto, Ontario; San Diego, San Francisco and Walnut Creek, California; Austin, Texas; and Montreal, Quebec. They plan to continue to support all of their customers and product lines for now.
(This article has been updated with a comment from SAP.)
