Deal Values LLamasoft at Nearly $1.5 Billion

LLamasoft, which in recent years as grown to dominate the market for supply chain network design tools, has been acquired by spend management solution provider Coupa.

Supply Chain Digest Says...   The stock market didn't seem to think much of the deal, with Coupa's stock down 20% Monday after the news broke. What do you say? Click here to send us your comments   Click here to see reader feedback

The move was a bit surprising, as Coupa focuses on a variety of procurement-related solutions, such as spend analytics and global sourcing, which it wraps under the blanket of "spend management."

That focus is far afield from the LLamasoft solution set, which is built on its supply chain network design solution and more recently a suite of general supply chain planning and advanced analytics capabilities.

Coupa said the deal valued LLamasoft at about $1.5 billion – many multiples LLamasoft's annual revenue, which is estimated to be around $100 million.

"We are witnessing an unprecedented shift in what businesses are demanding to effectively manage their supply chains. They need instant visibility, agile planning capabilities, and timely risk mitigation support," said Rob Bernshteyn, chairman and CEO at San Mateo, California-based Coupa. "LLamasoft's deep supply chain expertise and sophisticated data science and modeling capabilities, combined with the roughly $2 trillion of cumulative transactional spend data we have in Coupa, will empower businesses with the intelligence needed to pivot on a dime."

Ann Arbor, Michigan-based LLamasoft, simply pulled away from the rest of the supply chain network design software market in recent years, through a combination of smart product development, aggressive marketing, and in some cases buying up rivals such as IBM's LogicTools and the UK's Barloworld Limited.

It's customer base features a high percentage of Fortune 500 companies.

LLamasoft CEO Razat Gaurav took over from founder Don Hicks in April, 2018, after a long career at first i2 Technologies and then JDA Software after it acquired i2.

"LLamasoft is one of the fastest growing supply chain software companies in the industry today – and I believe it's poised for an incredibly successful future," said Gaurav. "The company already has a highly differentiated mix of optimization, simulation and machine learning capabilities - as well as an emerging, game-changing platform that will revolutionize supply chain decision making."

LLamasoft has recently been investing heavily in artificial intelligence capabilities.

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Llamasoft was founded in 2002 in Ann Arbor, Michigan and has raised more than $56 million, according to Crunchbase data. Its largest investment was a $50 million Series B in 2015 led by Goldman Sachs, which at the time was said to value LLamasoft at $250 million.

The stock market didn't seem to think much of the deal, with Coupa's stock down 20% Monday after the news broke.

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