Category Archives: SaaS

Who’s Funding Your ProcureTech Vendor?

This question is more important now than ever! Not only is the RCD (Relative Corporate Debt) of many FinTech companies too high right now (See: Calculating RCD), signalling a decline in customer service and potential abandonment, if not outright vendor failure down the road, but the ongoing viability of many VC and PE firms, or at least their ability to support their investments, is also in question.

Many firms are too heavy on AI plays that are still losing as much as $4 (or more) for every $1 of revenue they take in, requiring massive ongoing investments to maintain. Even big PE funds only have so much cash to burn, and the only way they can do this is to liquidate assets and holdings if they can, or, in the worst case, simply write off losses (and associated future costs) of those holdings they can’t liquidate.

Softbank’s end-of-year investment in OpenAI really puts this into perspective, as chronicled by Mr. Klein of Curiouser.AI and Berkley in this LinkedIn post.

As far as I am concerned, this is bad news for any of SoftBank’s FinTech holdings that may require funding in the next few years, and a warning to make sure you don’t select / continue / depend on any of their FinTech holdings where they have a large or majority stake until verifying those holdings are profitable and likely to stay that way! (Now, SoftBank has traditionally had very good investment chops, so it’s likely the majority of holdings are profitable …)

However, they aren’t the only firm making huge over-investments in AI and weighting the portfolio down with companies that might never see a profit. This means that this warning also applies to many other Tech investment funds, starting with Thrive, Dragoneer, Altimeter, and Coatue who also have large stakes in OpenAI. They could all end up in the position where they are going to have to sell off / dump assets to maintain the ridiculous losses OpenAI is seeing, and any holdings not performing well will likely be the first to go / get dropped. (Remember that the average age of the first three of these groups is 15 years, and they are [becoming] modern SaaS/AI heavy, whereas Softbank Capital has been investing for 30 years, and is a lot more diversified. Softbank may be able to weather a complete crash in OpenAI valuation if it occurs. But these other firms may not!)

But, as we noted, the real warning is not for SoftBank or these other mega funds (in the significant 8 and 9 digit range) that have funds to weather a storm. It is for the smaller funds, especially those less than 1 Billion, that are too AI heavy.

As a result, when selecting any FinTech platform, you need look at the portfolio of any investment player with a substantial majority stake. If a large segment of the portfolio of a significant/majority investor is “AI” companies losing money hand over fist, then the vendor of that FinTech platform cannot be considered a stable vendor if it is not profitable. This is because you can’t count on the fund having the resources to support the vendor to profitability, even if vendor is a fund darling. This is the case even if the RCD calculation looks good! A lot of the smaller funds can’t afford an AI crash given the AI-heavy focus of their SaaS portfolio.

(Face it. An AI crash is coming. Too much valuation against too little return, and investors only have so much patience. The only thing we don’t know is how severe the crash is going to end up being. Is it going to be a minor drop across the tech markets or a major crash like the 2008 housing crash or the 1999/2000 dot com crash?)

The Real Value of the Sourcing Innovation Mega Map (2026 Ed)

1) It shows you how expansive the space is and why you need proper Assisted Solution Selection:
[Successful Vendor Selection: The Series]

2) It shows you how unstable the space is:
a) Fifty-Four (54) companies are gone.
b) Ten-Plus (10+) have been acquired and/or renamed …
… and could be discontinued / go out of business at any time!
c) for some functions, there are too many options!

a+b) While a disappearance rate of roughly 6% a year is only about 20% higher than normal, it’s just the tip of the iceberg! Right now, the RCD (relative corporate debt) of a majority of vendors is too high and we’re on the cusp of a purge unseen in two decades (that most of you won’t remember). I am still predicting up to 15% disappearance for the next 18 to 24 months between

* mergers/targeted acquisitions so both firms can remain on the cusp of viability
* fire-sale acquisitions to pick up talent and customers
* outright bankruptcies from vendors who aren’t getting funding

because the market is still tight, the software project failure rate is at an all time high (88%, 94% for Gen-AI), and your C-Suite (who got burned last time) is still afraid to give you budget.

Post Edit: Happy to say I’m not alone. See THE PROPHET‘s predictions for the FinTech investment market for 2026:

c) even when you segment by spend-size (not market size), culture (not geography), and industry, you still can’t support more than a few dozen players. In some cases we have 100!

3) It proves that, statistically, there are quite a few vendors that are not good.

[How to Select a Vendor NOT likely to screw you over; Part of
The MOST important clause in your (Procure)Tech (SaaS) Contract Series]

I’m going to remind you again that some estimates put the number of psychopaths in professional positions in NA at 5%, 3 of the 4 top jobs they seek are Salesperson, Lawyer, and CEO … and they are all attracted to the industries with the most money. Right now, that’s FinTech (subsumes ProcureTech).

As many as 1/20 sales people/CEOs don’t care if you get value or not, as long as they get the deal. Especially when the firm took too much money and they have to hit unrealistic sales targets to keep their jobs!

For those of you who believe all founders and all sales people honestly want to deliver value, as a former developer/architect/CTO, I will tell you this: bullsh!t!

Some founders see their peers doing startups and getting rich in 5 years and just want the same. They’re building to sell, not to build long term customer value.

But sales people can be much worse! I have had the displeasure on more than one occasion to work for companies in tech positions where, even after the sales person was expressly told the product didn’t do X, couldn’t do X for Y months/years, and it wasn’t on the roadmap, still told the customer X was available today and they’d have it on initial implementation if they signed the deal now. (These are usually the same salespeople that never seem to stay anywhere too long …)

And here’s our updated Cascading Mega-Map 2026 Edition!

The Sourcing Innovation Source-to-Pay+ Cascading Mega Map! (2026 Edition)

^{(c) 2025-12-15}

Still useless, but still slightly less useless than every other logo map that clogs your feed!

1. Every vendor offering verified as of 4 days ago!

2. Every vendor logo is clickable!

3. Every vendor is mapped to a meaningful category as of the last date of analyst investigation!

So what’s the point?

To again make it utterly clear you can’t select a vendor based on a random grouping of logos on a map, even if they are categorized!

Not even if the map categorizes the vendors by market size, industry, and/or geography. Those are just proxies for organizational spend, solution needs and cultural requirements. And not every mid-market manufacturing plant in the USA is the same.

The only way to select a good vendor is to follow a proper assisted process and engage an expert who understands what vendors are out there to identify the right vendors to invite to the RFP process once your true needs have been identified.

Especially considering the true number of vendors out there is many times more than what an average big analyst firm will tell you, especially when they restrict their recommendations to their paying clients in their maps, and multiples of what an average big consultancy will tell you, that only knows their partner solutions (that they need to maintain significant focus on to maintain their preferred partner status).

So let this be proof that there are a lot of logos and that, if you want logos, you got logos! 666 of them!

			Source-to-Pay
Souce-to-Contract			Procure-to-Pay				Intake-to-Orchestrate
Sourcing + SXM + CLM	Sourcing + Analytics	SXM + Analytics	e-Procurement	Invoice-to-Pay / AP	Expenses	Payments (& P-Cards)	Training
Sourcing + SXM	Sourcing + CLM	SXM + CLM		Sourcing	SXM	CLM	Analytics
Direct Supply Chain	Cyber Monitoring	ESG / Carbon	Marketplaces	Legal	Marketing	SaaS	Intelligence