With Rubicon Technology Partners as principal owner, Tacton will take on CPQ competitors like Salesforce, SAP and Oracle.
When the Roman commander and statesman, Julius Caesar, crossed the Rubicon river in 49 B.C.E., he is said to have uttered the classic Latin sentence, “Alea iacta est” or in English, “the die is cast.” The meaning in this case was Caesar challenging the Roman state.
This symbolism is interestingly related to the announcement a few weeks ago that the American private equity firm Rubicon Technology Partners (Rubicon) is buying the Swedish developer of configure, price and quote (CPQ) SaaS company Tacton. The purchase means that Tacton with Rubicon Technology Partners gets the muscle it needs to further scale up and accelerate its global growth. But it looks like a tough job; we’re not talking about small players that are being challenged. The list of heavyweight CPQ competitors includes Salesforce, SAP and Oracle, just to name a few. However, Rubicon’s strength creates good conditions for Tacton to move forward in its challenge.
“Tacton is uniquely positioned to solve the most pressing configuration challenges facing manufacturers around the world,” continued Tacton’s CEO, Bo Gyldenvang. “Now, with the investment from and partnership with Rubicon, we have the opportunity to bring our innovative products to a broader base of global customers than ever before. We look forward to the journey ahead with a partner that shares our vision for the future of manufacturing and has the resources to supercharge our growth.”
Tacton’s revenue is currently around $40 million on a 12-month basis, of which approx. 75 percent comes from the software. The company has over 250 employees and the business appears to be going well. Getting a food hold in the American market has been and is tough, but that has now been partly paid for by the European business. With Rubicon, this position is more exciting. Not only because of a stronger financial situation, but even more so related to the American investment firm’s broad and sharp network of contacts, which in turn can provide profitable entrances to business as new potential partnerships see the light of day. The latter is a recipe for success in North America.
Rubicon is based in Boulder, Colorado, and focuses exclusively on investing in and growing software developers into the corporate world, type B2B.
No purchase price is specified in the press material, but the deal presumably involves big bucks. This is partly because Tacton has developed a really sharp technology, which has earned it a top position in the analyst Gartner’s Magic Quadrant, and partly because there were several stakeholders involved in the bid for the company. It is not every day that globally successful software companies are for sale.
Furthermore, it should be noted that Tacton’s investment partner since 2017, GRO Capital, will have a continued role as a co-investor and will join Rubicon to support the next phase of Tacton’s scaling journey. It is still unclear what role the other co-owner, Kirk Kapital (an investment company linked to the Lego family), will play.
The Overall Strongest CPQ Solution, According to Gartner
Tough or not, a reasonable conclusion is that this investment has the potential to accelerate Tacton’s global growth strategy, particularly in North America, as the company continues to scale through product innovation and go-to-market expansion that builds on the company’s momentum as a category leader.
The global CPQ market as such is also interesting in terms of growth. This is partly because the market is still quite small. The numbers vary depending on who you ask, but for 2023 the level is somewhere just over one billion dollars. However, the growth looks promising as figures into 2025 range between $2.3 billion up to $3.6 billion.
Strong revenue generators in this market include CPQ solutions from Salesforce, SAP and Oracle, while Tacton stands out for its technology.
Furthermore, the list of companies that use CPQ solutions connected to PLM, ERP and CRM systems is impressive and bears witness to how strong and promising this technology is. ABB, Bosch, Caterpillar Propulsion, Daimler, MAN, Mitsubishi, Siemens, Toshiba and Yaskawa are among the many prominent users.
In Gartner’s Magic Quadrant for CPQ developers, the latest edition from October 2022 positions Tacton as one of the clear leading players. In terms of visionary strength, Tacton is second just behind Salesforce Industries CPQ, while in terms of the program’s ability to execute, the company placed third behind Oracle and SAP. But if you weigh both these aspects together, Tacton can be seen as the leading solution.
In addition, Gartner defines the CPQ software market as application suites that make it possible for sales organizations to automate and optimize the creation of quotes and capture orders. But, as I said, this requires strong connections and openness towards the PLM, ERP and CRM solutions in the companies.
It is clear from this that configuration and design automation solutions play an increasingly important role in the manufacturing industry. This is partly about being able to develop efficient product development processes, and partly—at a later stage in the product’s life cycle—being able to connect the variant management to the sales processes. In short, a sharp CPQ solution should facilitate work at several points in the product development, distribution, sales and aftermarket chain. That says something about the utility, breadth and value of having such a solution in place.
Connections To CAD Solutions Like SOLIDWORKS and Autodesk Inventor
A decisive feature for the usability of Tacton’s configuration solution concerns the connections between the company’s software and various CAD solutions. For example, they have a SOLIDWORKS-dedicated solution, one for Autodesk Inventor and PTC Creo.
When it comes to smart configuration setups related to product development and variant management the benefit of configuration engines is obvious. You get information via a wizard about which variants are possible depending on which values are entered. The entire process can be automated and the time-consuming job of producing individual drawings and models for each option can be avoided. In this, weeks or days can essentially become minutes.
But what about later in the chain? A good example of the benefit for sales is when a salesperson is negotiating with a customer who has special customization requests regarding the product he or she wants to buy. Through a CPQ solution from Tacton, you can give direct and quick information about everything that is connected with multiple variant possibilities, such as colors, materials, mechanical configurations, software and more. On the one hand, the composition of quotations regarding today’s often complex products is facilitated. In short, customers are informed more quickly about the possibilities and for product development the engineers do not have to spend time preparing the necessary manufacturing documents. The software does that.
The solution generates customized 3D models and drawings from the CAD systems for use in production and sales processes. As a result, manufacturing companies can reduce product customization costs, respond more quickly to sales inquiries and simplify the entire digital manufacturing process.
“This plays well with the needs created by the massive wave of digital transformation taking place right now. The industry needs 3D models and automated solutions that can take digital manufacturing to the next level,” says Gyldenvang.
Subscription-Based SaaS Solution
As a strong player in the configuration development industry, Tacton has also brought innovations in sustainability, advanced product configuration and SaaS to change the way manufacturers worldwide do business. Building on years of extensive research and dynamic solution technologies, the company has paved the way for what it describes as a “groundbreaking approach that enables B2B manufacturers to manage complex requirements and sales processes in the B2B manufacturing ecosystem.”
“Since its founding 25 years ago, Tacton has transformed from a Swedish configuration management startup to a global CPQ SaaS vendor, delivering a best-in-class product to accelerate manufacturer’s revenue goals while revolutionizing their sales experience,” comments Gyldenvang. He points out that Tacton’s CPQ solutions, “enable agile and resilient end-to-end operations, while delivering a flawless digital customer experience when selling complex equipment and related services.”
Tacton has also quantified its software’s effectiveness, stating in the press material that “with 75,000 active users of Tacton today, Tacton customers, on average, see a 34 percent increase in efficiency related to time spent by sales creating a quote, a 30 percent increase in sales volume and boost their profit margins by 20 percent by decreasing order errors and offering fewer discounts.”
A Technology with A Future of Its Own
Overall, the capabilities Tacton’s product development department has created within the framework of its CPQ software have also been implemented at Rubicon Technology Partners.
“Industrial manufacturers are being forced to reimagine how they offer their products and services to customers alongside the operational challenges of increasing product complexity, rapidly changing customer demands, shifts toward digitized buying experiences, and intensifying focus on environmental footprint at a product-level,” commented Dan Levy, partner at Rubicon.
He continued, “Tacton’s CPQ platform stands out as uniquely differentiated in solving these critical configuration problems for some of the largest and most complex manufacturers in the world. We are thrilled to have the opportunity to partner with the Tacton team and GRO Capital to help accelerate the company’s growth and shape the future of manufacturing software through continued product innovation and go-to-market expansion.”
Finally, it is stated that the current primary owner GRO will remain involved.
“We have been on an amazing transformational journey with Tacton in the last six years. Based on its unique product approach, Tacton has established itself as the recognized market leader in CPQ for complex manufacturers,” claims Lars Lunde, partner at GRO.
He further notes that the company has always excelled through a talented team and that they are convinced that the company has a bright future ahead as it strives to scale further globally.
“We are therefore grateful that GRO Fund III will continue the journey with Tacton together with Rubicon Technology Partners, who shares our vision for the company and undoubtedly will be able to accelerate Tacton’s path towards this vision,” concludes Lunde.
