If you're running a business, you know you need a payroll solution. Payroll checks, automatic deposit, 401K, compliance, W-2 forms - you would have to be nuts to try and deal with this yourself. No surprise that market leaders are established because these problems have existed for dozens of years.
Billing also has a similar set of complexities - mailing paper bills, email bills, online bills, check payments, electronic payments, bill delivery to bank sites, etc. So how come there aren't established market leaders? How come businesses try to patch together disjoint solutions to solve these real customer problems? I call it the "Educational Sale" problem and it's a common in developing industries.
Pre-internet, what a company needed to perform their billing was pretty straightforward. Print a bill, mail a bill, get a check. If a company had enough volume of bills, they would use a print vendor for their outbound bills and a lockbox vendor to process their checks. These print vendors got very good at handling paper. Not just bills, but mutual fund statements, jury summons, junk mail, you name it. The market for these outsourced print services is incredibly fragmented. There are hundreds of companies in the U.S. alone who offer these types of services. There are some big boys like DST Output and RR Donnelly but for the most part the industry is served by small and mid-sized companies.
With the advent of the internet, the demands for billing services changed. Companies no longer wanted to mail bills, they wanted to connect with their customers online where it was cheaper and more efficient. A number of electronic billing companies were founded to help companies address these new world needs. The ERP systems like Oracle and SAP started building in some eBilling capabilities. For the most part, the print vendors did not respond to this new threat to their business and as their stock prices reflect, they have mostly languished.
So why is billing solved with a multi-vendor solution while payroll is a single vendor solution? This is the root of the education sale problem and also explains Billtrust's acquisition strategy.
For the last 11.5 years Billtrust has quietly been building what we think is pretty revolutionary. A complete end-to-end billing solution that includes world class print & mail AND electronic billing and payment. There are less than a handful of single-vendor complete billing solutions in the market and my bet is that over the next five to ten years one or two will emerge as the market leader. Our plan is to be one of them.
We now have over 1,000 customers, send out over $250 billion in bills annually, and have embarked on an aggressive acquisition strategy that has seen us acquire three companies in the last eighteen months. In November we partnered with Bain Capital Ventures who agreed with our thesis about market consolidation and the eventual emergence of leader. They took a bet on Billtrust.
There's a lot that can go wrong. Vision is great but execution is everything. However, if we're right and we execute, in five years Billtrust will be the answer when someone asks "Who is the market leader in Billing Services?"