Global Expansion of a SaaS World leader
How to achieve the internationalization of a SaaS company . A guideline to the global expansion Strategy .
We sketch one of the most beautiful success stories of globalization and international development in the world of SaaS. What are the challenges and success factors of the internationalization of a software editor. The conquest of international markets is essential for software publishers, but how to design the global expansion.
Global Expansion Case Study: Kyriba Strategy
This case relates to Kyriba, the world leader in cash management solutions.
Company Profile :
Recently acquired for $1.8 billion by Bridgepoint. Over 2000 customers and a presence in over 100 countries worldwide. Launched in 2003, the startup has now become a unicorn valued at over $1.2 billion. It has more than 1000 employees. Kyriba, created in Paris, is a spin-off of the company XRT. It is aiming for a turnover of 500 million in 2022.
Targeting the American market
Kyriba is today the leader in the sector in the USA. With more than half of its turnover and a market share of more than 20%. Priority was quickly given to this market, which is the world’s largest software market.
Incorporated American company and raising funds
In 2003, the choice was made to establish the head office in San Diego and to become an American company.At the time the company raised more than $80 million, which at the time would not have been possible if the company had remained European. In 2019, the company raised $160 million.
The USA regional approach
Given the size of the US market, it is essential to adopt a regional approach. It is complicated to develop simultaneously in the East and in the West of the United States. Five years after San Diego in 2003, Kyriba opened offices in New York.
Being present in Europe
Alongside the American journey, Europe has not been left behind. Well established in Europe, mainly in France where the company has developed a 35% market share. The company quickly established itself in Spain and England. France is also the country where the heart of the product development teams and R&D are located. There are more than 300 employees in this field.
Global Expansion Strategy and Market in Asia
The Asian expansion began in 2012 in Japan where the company is developing rapidly. At the sale time, a market watch starts in Southeast Asia and more particularly China. This huge market is then the next major target country. For good reason, half of the world’s financial flows are made with Asia, which makes it a target of choice.
The international development model
It began with an analysis of the market potentials and the possibilities of making an acquisition in the USA. The conclusion was that the market, the targets and the timing were not right for M&A . It was then decided to open local offices and to recruit sales representatives to acquire the first reference customers. It is difficult to establish itself on the American market for a French company. Financial strength and ability to scale are often questioned.
It was only after 3 years of effort that the signs of success appeared in the United States.
It was decisive to win major references, in this case Airbnb, Uber and Dropbox. This leverage has built credibility with other prospects.
Landing models differentiated by country
Development by direct settlement is justified in large markets such as the USA.
We do not recommend to invest directly in less strategic markets or markets with a very different culture.
This is what Kyriba has done in the Middle East and in Japan. They formed a joint venture with SunBridge Corporation in Japan. In this territory, association with Japanese companies is essential. It is a model that works perfectly with a favorable acquisition cost.
Product Market Fit and Differentiation
The key to success is the adequacy of the product with the market. The local set up is combined with the work of competitive positioning and differentiation factors.
It is clearly necessary to be able to define the “nice-to-have” and “must-have” solutions offered to customers. Also, it is preferable not to have to locally adapt more than 10% of the solution or product. Indeed, if the need for adaptation is too high, it is often because the market is not relevant.
In the case of Kyriba, this was the case in Brazil. The required level of integration of taxation, legal and finance aspects did not make this market attractive.
The development of Value Added Resellers was also a strong development axis. But this method of selling nevertheless requires significant resources. You need a team that manages and incentives the resellers. Then, ensure their training and coach them intensively at the beginning. This model is particularly suitable for small and medium-sized SaaS companies.
Team management and mobility
To build a corporate culture, it is interesting to move employees across different countries. The proper dissemination of knowledge acts as an element of staff motivation.
At Kyriba, all employees go through an induction period in New York, San Diego or Paris. Adapted tools and methodologies serve the integration and onboarding of employees. The company must equip itself with high-performance communication and reporting tools to grow internationally.
Apart from integration, transversal follow-up is essential. The implementation of global reporting provides visibility of performance at local and global level.
Quarterly meetings complete the communications. The teams in each country present the latest product developments. The results by region and future objectives are communicated to all.
At each stage of country development, strong involvement of company management is a key success factor.
Corporate culture and knowledge sharing
To successfully conquer international markets, the transfer of knowledge and the globalization of teams is necessary. For this, it is necessary to develop a playbook with processes and to globalize action plans. This goes hand in hand with a common corporate culture and values which conveys belonging to the same group in all its countries.
Focus and Engagement of the Managers
Kyriba has chosen to be strong in its main market, the United States, before accelerating internationally. In the second step, the focus is only on a few markets. The international expansion is a project that requires strong investments and a lot of focus.
The implication of the leaders must be maximum and this from the start of a new country. Company decides to show a real commitment from the whole company for each set up.
Conclusion for a Global Expansion Strategy
To be a SaaS company, a software publisher, is a priori to have an International DNA. The cloud has made it possible to globalize software solutions and apps are real growth accelerators. The fact remains that alongside tremendous opportunities, international development remains a challenge with many pitfalls.
Kyriba has adopted an organic growth strategy. Many players raise significant funds from Venture Capital and therefore go for external growth. The so-called Build up strategy enables it to accelerate its global expansion.
It was not until 2019 that Kyriba made its first acquisition with the American FiREapps.
To scale effectively, international support is a strategic resource for the company. Experience, knowledge of markets, methodologies, and international culture are critical to lead your project to success. Beyond the implementation of the international development strategy, carrying out a diagnosis and having surrounded oneself are essential.
Another example, that of the leader in Artificial Intelligence, Sisense will illustrate the creation of an international management culture.
Ipanovia supports you in your process of internationalization and expansion in foreign markets.
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