the box maker probably has a very high cost of capital, and Apple has a very low cost.” Not to mention more than $50 billion in the bank.
The second appealing point about Taulia, Hannah says, is the founding teams’ deep experience in the area of accounts-payable software. Taulia’s chief financial officer, Markus Ament, and the managing director of the startup’s Berlin office, Martin Quensel, both helped to code SAP’s basic payment software. Meyer, Ament, Quensel, and CTO Philip Stehlek all worked together at Ebydos, a Frankfurt-based software company that made an SAP-compatible invoicing system and was acquired by document automation software maker ReadSoft in 2006. Before these four even approached investors, they had built a working system and signed up one Forbes Global 2000 company to use it. “It’s a fairly rare opportunity to find a highly functioning organization with a system already in place,” says Hannah.
The third factor: the potentially huge profits, given that 60 to 70 percent of the Global 2000 use SAP. “We like it because you can charge for this product on a pay-for-performance basis,” Hannah says. “You can go to the treasurer of a company and say, ‘You are sitting on $10 billion in cash and earning 10 basis points [one tenth of one percent interest] on some money market account. If you paid your supplier early you’ll earn the equivalent of 10 percent annual interest for the money you advance. It simplifies things for everybody, and Taulia can participate in a big way in the value it creates.”
While it took a few SAP and invoicing experts to build Taulia’s software, the components are fairly simple to understand. There’s a Web-based portal for suppliers where they can see all of the invoices they’ve sent to customers. The portal shows which invoices have been paid and which are still pending, and it lets suppliers choose what early-payment discount to offer (or, in an interesting twist, to query buyers on what kind of discount it would take to shake loose an early payment).
Then there’s a small piece of code, written in the same language as SAP’s ERP software, that Taulia installs alongside SAP to monitor payments and pass that data to the Web platform. “There’s no change to the way payments are actually being made,” says Meyer. “It’s just that the buyer can, at any point in time, choose a [discount] rate that’s attractive to him, and the supplier then knows how much of a discount they would have to accept, so they can trigger that when they need it from a cash management perspective.”
Meyer says it’s the right time to add this kind of flexibility to automated invoicing and accounts-payable systems. “There is a change of mind happening right now,” he says. “Analysts are saying to the Fortune 500, ‘You have billions in short-term investments at basically zero
