Dive Brief:

• Coupa acquired supply chain software company Llamasoft for $1.5 billion, according to a news release.
• The deal brings Coupa's spend management and procurement technology together with Llamasoft's supply chain and network planning software under one umbrella, at a time when businesses are prioritizing agility and the ability to "pivot on a dime," Coupa CEO Rob Bernshteyn said in a statement.
• The purchase of Llamasoft marks Coupa's fourth acquisition in 2020. Coupa bought Bellin, which provides treasury management software, ConnXus, a supplier diversity specialist, and Yapta for travel spend management this year — all moves to expand its capabilities in procurement and spend.

Dive Insight:

The pandemic is accelerating the need to closely align supply and demand — a task Coupa's acquisition of Llamasoft seeks to address by putting procurement and supply chain technology in one place. 

"Combined, the two companies can shorten the lead time between supply chain decision and execution by having all the data in one system," according to the release.

Companies with Llamasoft can use artificial intelligence to map, model and create digital twins of their supply chains. Mapping and running scenarios have been important to supply chain visibility and risk mitigation for several years, but, like many factors, the pandemic has amplified their significance.

Coupa has been working with customers on linking inventory management and procurement via software to avoid wasted spend. The Llamasoft acquisition furthers the operations-procurement tie-up, as the llama.ai platform includes a function to build and test inventory scenarios and develop targets for safety stock.

The companies boast an array of prominent customers. Llamasoft on its website lists businesses including Boeing, Ikea, Heineken and Walmart. Coupa has seen an uptick in customer interest as businesses focus on reducing, or at least managing, spend. Its roster includes Office Depot, Sanofi and Sprouts Market. Walmart will expand its use of Coupa to include procurement and contract lifecycle, the software company said Thursday.

Cloud computing is gaining steam as supply chains replace older technologies with newer ones to integrate processes. P&S Research predicted the global cloud supply chain management market would reach $11 billion by 2023.

Supply chain experts on LinkedIn had mixed viewpoints on Coupa's purchase of Llamasoft and the functionality for end-users.

"Time after time, I see when venture capitalists buy software providers and drive consolidation, that there is brain drain and diminished capabilities. Will this be the case here?" Lora Cecere, founder of Supply Chain Insights, wrote in a post referring to the acquisition.

Some commenters questioned if the two companies could operate synergistically and whether Coupa's wide-reaching portfolio might overshadow Llamasoft's niche. But others said it could hint at the future supply chain — one in which AI drives decisions and value creation outweighs cost-cutting.