We did a first discussion with Ben in 2020, giving an overview of the firm. But there’s been some interesting updates on his side. SAP Concur is an American SaaS company, providing travel and expense management services to businesses. It is headquartered in Bellevue, Washington and Staple has now entered into a collaboration with this entity within SAP.

You can see the first interview with Staple here: https://seiml.com/venture/interview-with-ben-stein-ceo-co-founder-staple-ai-pte-ltd/

Script of Interview

Interviewee                                Mr. Ben Stein (BS)

Position                                      Co-Founder & CEO

Company name                        Staple AI Pte. Ltd.

Company website URL            https://www.staple.io/

Interviewer                                John D. Evans, CFA (JE)

Interview conducted on          15th March 2021

JE: Okay. Good afternoon. A brief note for the viewers out there. Today, we are speaking with Mr. Ben Stein, who is the co-founder and CEO of Staple AI, a FinTech company headquartered in Singapore. And we did a first discussion with Ben in 2020, giving an overview of the firm. But there’s been some interesting updates on his side. SAP Concur is an American SaaS company, providing travel and expense management services to businesses. It is headquartered in Bellevue, Washington and Staple has now entered into a collaboration with an entity within SAP. And that will be the focus of our discussion today. So, Ben, let me just kick off by saying, we first met when you were in the F 10 accelerator. But you more recently participated in the SAP Foundry program in Singapore, ending in December 2020. Tell us what that was all about, and how it got started.

Details of the Collaboration

BS: Sure. Thanks, John. So, SAP run a really fantastic innovation and collaboration program called SAP.io. And it’s a foundry; it’s also known as the SAP Foundry. But basically, it focuses on different technological themes through which SAP and its customers can collaborate with startups. So, they have periodic incubation periods or periodic acceleration periods, where they partner with startups in different parts of industry. So, for example, the theme that we were part of was entitled COVID recovery and the perfect transaction. And this is centered around basically making a more streamlined and more digitized for consumers and businesses to basically transact. Staple forms the good part of the perfect transaction, because we can help to digitize and capture the documentation around a hypothetical perfect transaction. There are other things that they, SAP, coordinate through this SAP.io foundry program. I think one of the more recent ones is around 5G, so 5G focus startups and how they can partner with SAP in different ways. Prior cohorts include things like Industry 4.0 and also KYC and anti-money laundering. Although there’s different themed programs, or different themed cohorts, there’s also different locations that run this program. We are obviously in the Singapore cohort. But there’s also cohorts running in North America and Europe as well.

JE: Okay, so just a follow up question to my point, because we know about incubator and accelerator programs. The Foundry program is completely focused on SAP related entities, unlike accelerator programs, where they may be promoting you and starting business development with any company whatsoever.

BS: Yes, that’s right. That’s absolutely correct. So, it’s more of a partnership and it’s a collaboration. More of a corporate accelerator way, when we think of a company, the sponsoring company, in this case SAP get some benefit out of the program as well.

JE: Okay, understood. I’ve added a word to my terminology today ‘foundry’ program. Good. So, what is the main benefit that Staple will get from participation in the program is this sort of future business development?

BS: Generally it is, but I could probably be a little bit more specific there. First of all, it’s an obvious channel partner. This is a way for us to get our product into the hands of more customers. It’s a partnership model where we get benefit in SAP or SAP Concur get benefit. Second benefit for us is basically exploring new use cases. Although the SAP foundry program that we participated in was focused on SAP Concur, which is around expense and travel, as you mentioned, we’ve also had connections to other parts of SAP, big organization that is, into areas such as procurement, or general or financial management. There are number of areas where our solution could help where we didn’t previously explore. New use cases have been brought to our attention as a result of participating in this program. And thirdly, it’s more geographic reach for us as well. We are particularly focusing on the APAC markets or that Asia Pac market, as well as India. And to some extent, China. So, it’s really helpful to have a partner like SAP Concur to help reach those markets, it’s much more difficult to do that on your own as a small startup.

JE: Exactly. Now, that you’ve described the foundry program, SAP Concur is I guess, a division of SAP the conglomerate, and it’s just focusing on the specific travel and other things you were mentioning?

BS: Yeah, that’s right. So, it is it is a very defined department or part of SAP. Thinking Concur was acquired, maybe several years ago now, believe it was for about 8 Billion dollars.

JE: 2014, I think it says on the website.

BS: And, yeah, a very, very large and impressive customer base of tens of thousands of customers.

JE: So, what will be the nature and the details of the collaboration? You’ve mentioned an APAC focus, but how will you work together? How will you identify customers, what sort of industry, etc.

BS: So, it’s an evolving relationship. The intention from SAP perspective is basically to improve their product offering or their platform offering. So, SAP is a platform, it is enriched by bolting on a lot of these startup capabilities from different small, new startups. So, at the moment, we’re exploring opportunities together where Staple could potentially service a gap that previously SAP didn’t focus on. So, it could be a particular language, it could be a particular kind of document or style of document that that Staple has focused on. But to date, it hasn’t been a real priority for SAP. So, partnering with startups like us is a fast way for SAP to improve and enrich their platform offering. And it’s worked for them, Concur is probably a really good example of that if acquiring that capability was a good move to enter the cloud based travel and expense market. So, at the moment, in terms of the way it works for us is, it’s on a very as needed basis. So, we work with the business development teams within SAP to identify potential solutions that we could offer that could satisfy their customers’ needs. So, it could be with account managers or different BD representatives in different parts of the world. And we’re basically working together collaborating to come up with a solution incorporating both SAP technology and Staple technology.

JE: So, you’re located in Singapore. And I know there’s a lot of SAP offices throughout the APAC region. So, could you be working just through the Singapore Office of SAP? Or might you be in contact with any number of offices in Asia Pacific to develop business leads?

BS: Yeah, at this point, it’s really any office. We’ve spoken with representatives from India, Japan, Thailand, but I believe, even Australia. So yeah, it’s definitely not confined to Singapore. And that’s part of the beauty of this program, we suddenly have access to a very broad network within SAP. We’ve actually spoken to people in the US and Germany. So, definitely in that short span of time, we’ve been able to reach a very broad network within that company, just fantastic.

JE: Interesting. So, in terms of the contract relationship, since it’s so broad and so many offices, is it sort of like a one-year trial period, is it open ended, what is the nature of the relationship term to develop these new customers?

BS: So, that is that is the way I describe how it is at the moment, it’s a very kind of ad hoc or as needed basis. But we are in the process of streamlining that. So that we would be an integration that will be readily available to customers through the SAP platform longer term. Now, from the technical perspective, we’ve done that. So, users can basically upload multi language documents into Staple system, and then it will appear in SAP Concur. It’s just the marketing side of things is something we’re finalizing now. And once that’s done, we’ll be basically an integration available on SAP’s marketplace or SAP Concur’s marketplace. That’s an annual arrangement. There’s a lot of startups that are that are on that marketplace. I believe it’s an annual partnership agreement. And essentially, there’s a fee to participate, and then a revenue share component in order to continue the partnership on the marketplace.

JE: So, if you and SAP Concur identify a business opportunity and it goes forward, you get a share of that revenue stream. So, this is a way to build up your revenue stream in partnership with SAP. Okay, very good. What about resource sharing? Now, I don’t think you have a lot of ofices at Staple, you’re headquartered in Singapore. So, if things go forward with that, in the future, allow you to have staff in some of the SAP local offices, is that sort of physical collaboration a possibility in the future?

BS: I’d like to think so. I like to think anything’s possible. But at the moment, no, at the moment, it’s more just a virtual partnership. With the current conditions in mind, we basically do everything remotely. In terms of say that in terms of physical resource sharing, yeah, we were not really co located. In earlier years, I believe the foundry would have given office space to startups. So, there was a physical office, physical part of SAP that was available to startups, but because of the COVID situation that hasn’t happened as planned this this time around. We obviously, in the very nature of our partnership, we do share our business development resources, a win for Staple is a win for SAP Concur and vice versa. Perhaps longer term, there may be arrangements where we could jointly market our product, there may be some kind of joint marketing campaign there, but that’s not yet determined.

JE: Okay, so over the longer term, if Staple and SAP find a lot of common business projects to work on together, firstly, do you have to give them some sort of exclusivity in terms of your business development and marketing? And as a second, and perhaps separate question, is some sort of more formal partnership or maybe even acquisition by SAP something down the road?

BS: There’s no exclusivity per se. So, we have other partners, other technological partners that we work with, either as a pre-built integration, or as a sort of more manual or integrated arrangement. So, a white label arrangement, so we do have other partners of that nature and it’s definitely not an exclusive arrangement. To your second question, perhaps, I mean that’s always a possibility, but at the moment we’re focused on the next six months to try and bring our technology into the broader ecosystem and make this partnership work. But those things could be potentially something on the horizon.

JE: Let me ask something of personal interest, being myself in mainland China here, I think you’ve told me that that you now have capabilities to offer your services with Mandarin characters and such, so what do you see as the business potential either by yourself or with SAP in mainland China?

BS: So, Mainland China is definitely of interest to us. It’s just that we haven’t really had much opportunity to penetrate that market so far. Right now we are working with a digital bank in in Hong Kong. I know it’s not Mainland China. But it’s as close as we’ve come so far. So, the use case there would be processing a lot of onboarding or KYC documentation in order to help form an opinion on a lending decision. For a credit applicant it’s a fairly common use case. It’s something we’ve also spoken to banks in mainland China about, we’ve had conversations with them. It’s just, I guess, getting some of those opportunities over the line and closing those deals, obviously, open to any opportunities that or any viewers can recommend.

JE: That’d be interesting. And just as a sort of a personal observation of the big banks in China, everyone talks about the advancement of technology here. But when I go into a foreign exchange, processing transaction at ABC, wow, the number of papers, the number of things being chopped, they must have about 500 copies of my passport in that one branch. And so, technology is very advanced in China in some areas, but big financial institutions, it doesn’t seem to have developed a great amount in. In the nine years I’ve been here, it’s still very highly paper based.

BS: It is interesting, isn’t it, how these banking systems evolve in different regions.

JE: Yeah. And I think that’s also probably similar for the big insurance companies as well, which I deal with one or two. And I notice a very heavy paper element. So, there’s lots of potential, it’s difficult to approach these huge financial institutions, but there’s definitely a market need.

BS: Yeah. And your point on insurance is a good one. That’s also something we’re looking at here in Singapore and Southeast Asia. There are insurance companies that are still doing things very manually, using paper-based documentation for their application and claims processes. So, it’s another area we’re looking at, we just need to make sure we focus on those areas that are most promising and maintain that focus.

JE: Have you needed to make any further investments recently, either in staffing, or IT technology to support this potential expansion with SAP?

BS: Yes. So, we’ve just made another hire now in our machine learning team, Bhanuka Gamage is his name, he’s a machine learning engineer that’s joined us to help enhance our offering. We’ve also just agreed to bring on another PhD. I can’t say who they are the stage, but another PhD to help with the, the development of, of our deep technology. So, mainly the investment has been on the technical side, we do a BD resources as well, but basically kind of enhancing the current offerings we have, but also just making sure that our integrations are seamless in the sense that a Concur customer will not have their experience changed in any way or diminished in any way. So, we want to make sure that our product performs as intended, but in some respects, we’d like it to be invisible. That makes sense. Like we don’t want to try and make it too jarring in terms of that integration. That takes work.

JE: Okay. Very interesting. So, I mean, do you have to sort of customize the Staple system in any way to support the SAP Concur that would make it sort of like a different version that you might do? Or is it always a customized version for whatever customer you deal with?

BS: No, so with Concur, it’s just one custom integration. So, at the moment, the way our system works is that we ingest all kinds of information, all kinds of semi structured and unstructured documentation converted into a structured format. So, by structured I mean, that could be an Excel spreadsheet, CSV file, text file, maybe API or JSON output. Or it could be one of many integrations. So, I described a number of outputs there, there’s a little bit of work we have to do to get it into all those different kinds of output formats. Concur is just another kind of output from our perspective. So, we have different outputs, depending on whether the user wants to output it into a file or they want to output it into another system, in this case, Concur. So, it’s work, but it’s work we really need to just do and maintain once, we don’t have to maintain multiple connections to different customers.

JE: Okay, very interesting. So, with the customer case of a Hong Kong bank and with SAP by the end of this year, I mean, is Staple going to be revenue generating? Or are you there already? What’s the stage of the business development?

BS: Yes, so we are revenue generating. We were working with now three financial institutions and some other companies in other industries as well. We, I think we might have covered this in our last chat, perhaps, but we typically focus on the enterprise large end of the market. But we also do have some smaller customers as well. So, our plan is to basically continue servicing our large enterprise customers, but offer a much more streamlined, small version of our solution online as assessed SaaS product for smaller customers in Asia that want to access our technology. Sure, we are generating revenue. We may consider fundraising later this year. But we are making progress on the customer front as well, which is good to see.

JE: Okay, so I was going to ask about the fundraising. But I guess if one or two of these projects
comes through, perhaps you will start becoming cashflow positive.

BS: Potentially, that would be nice. We are not there yet. But that’s a possibility this year. Fine.

JE: Okay. Well, I mean, from our perspective, here, the year is pretty well just starting with Chinese New Year, and everything there. So, there’s still almost 10 months to go. And it sounds with this relationship with SAP and the other bank cases that you have you’re off to a good start. So, I hope that continues.

BS: So, thanks John.

JE: Anything you would like to add? Just for the viewers that I might not have thought of asking. I think this relationship you have? Oops. Oh, okay. Sorry. We just had a G FW interruption for five seconds, but we can edit that out. Okay, so I think we were just getting close to concluding. And I was just going to ask, you know, is there anything else that you wanted to tell the viewers about? Particularly the relationship with SAP Concur, and the potential that perhaps I didn’t think to ask about

BS: No, that does not, there’s not much that we haven’t covered. I just encourage anyone who’s potentially interested in this product or this technology to check out the SAP Concur App Center in April, and we should be listed live there, particularly people who are having challenges with processing multi language documentation or invoices that may be unusual in the sense that they have multiple tax lines or federal, state, provincial taxes that a lot of the online expense management systems don’t traditionally handle, that’s something we’re looking to help with as well. So, if there’s an interest will be on that app center shortly, or you can contact us through our website. We’ll be happy to help.

JE: Okay, when you get those App contacts pass through, and we can add them. Certainly, we’ll be putting on as we did last time, your contact details, website so people can come directly to you if they’re interested. But always increasing the points of contact, when those details are finalized to the App Center, would be a useful addition and we can always add on

BS: Thanks John, that would be great.

End.