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Kyriba Helps Clients Manage Cash Flows

As more domestic companies establish operations overseas, keeping track of the money and how to manage it becomes a problem.

To which San Diego-based Kyriba Corp. has a ready answer. It offers sophisticated cash management software, accessible through the Internet with a browser.

The 7-year-old firm has limited presence here in San Diego, with just a staff of five people, but it is gradually ramping up business as it signs new customers and continues increasing revenues at exponential rates, said Chief Executive Jean Luc Robert, who is also a minority owner.

“We’re on a trend right now where we’ve been doubling our revenue each year,” said Robert. Last year’s sales were $4 million, up from $2 million in 2005. This year, Kyriba should break $8 million, he said.

Keeping tabs on a company’s cash flow is relatively easy if there’s only a single bank and just a few offices. But when a company opens offices in far-flung locales and starts accumulating multiple banking relationships, then managing cash becomes far more challenging, Robert said.

Just as many companies are contracting for certain business functions like payroll, more corporations are seeking outside providers for their treasury management, Robert said.

Many rely on their banks for tools to manage cash flow, but this can become dicey when a firm has multiple outside operations and multiple bank accounts.


Multiple Locations

Kyriba’s solution aggregates cash data from multiple locations and bank accounts, and combines the data into a single Internet site accessible only to customers.

“We are seeing a lot of requests for proposals where businesses just want the ASP (application service provider), and don’t want a total software solution,” Robert said.

The latter require installing a server, then having it maintained and supported by the vendor, and paying for licensing fees. With the ASP model, users avoid paying for equipment, and only pay for the service as they use it. The cost savings range from five to 10 times less, Robert said.

Kyriba’s software was sufficiently compelling to AEW Capital Management, a Boston-based commercial real estate advisory firm whose customers include large pension funds.

“We now have a number of complex banking relationships with large corporations, and will soon be doing work overseas,” said Kent Wittler, AEW Capital’s treasurer.

“We were looking for a cash management tool that could track what was happening from a variety of different sources.”

Wittler said Kyriba’s software allows his company to get a better handle on what’s occurring in different funds it manages for each of its customers. AEW Capital manages a total portfolio of $15 billion, and generates annual revenue of $54 million.

Instead of getting the cash data from a variety of disparate sources, Kyriba allows the data to be assembled and accessed much quicker, Wittler said.

“It’s taking the data from numerous banks and consolidating it so we can see what’s going on globally.”

While such tools may seem to appeal mainly to major corporations, Robert said the software can be effective for any company that has multiple offices and banking accounts.

The cost structure can range from about $300 per month for a business with just a few users to one that is more than several thousand dollars per month and has hundreds of users, Robert said.


Major Clients

Among the 100 customers Kyriba has signed are such major corporations as the Interpublic Group of Cos., Liz Claiborne, Swift & Co., Kronos, Colas S.A., and Peugeot.

The business was initially a subsidiary of XRT, a software firm in France, but was taken private in 2001.

The majority owners are GRP Partners, a Los Angeles-based venture capital firm, and La BRED Banque Populaire, based in Paris.

About two-thirds of the firm’s business comes from Europe, and the rest from the United States.

Indicative of its global reach, Kyriba has offices in New York, Paris, Rio de Janeiro, Milan, and is opening another office in Madrid later this year, Robert said. It also contracts for some software support from a firm in Belarus, a former soviet republic.

Total employment is now at 70 people, and Robert expects to add another five people in San Diego by the end of the third quarter.

San Diego was selected as headquarters because Robert lives here. He married an American woman whose parents reside here, and found the climate and environs of this city preferable to Europe, although he still travels there often.

Robert, who has a masters degree in business and a law degree, ran an information technology unit of a company based in Paris for about 15 years. In 1998, the unit was sold to Sungard for an undisclosed price, he said.

After that transaction, Robert took some time off before joining Kyriba in 2003 as its chief executive and minority shareholder.


$40 Million Raised

Since its founding, Kyriba has raised more than $40 million in venture capital, including a $14 million round in March led by BRED Banque Populaire and GRP Partners.

Ken Bender, managing director for the Software Equity Group, a local investment banking firm that specializes in the software industry, said the software as service model that Kyriba offers has its advantages and disadvantages.

On the positive side, customers don’t have to invest heavily in costly equipment, and pay for the service as they need it. But many larger corporations usually already are invested in the licensing/server software model, and likely wouldn’t use a system that allows its cash management data to reside outside of firewalls it controls, Bender said.

“What you’re talking about here is trusting your treasury functions and recurring cash, and working capital to a third party outside your firewall which larger corporations and many mid-tier corporations are extremely reluctant to do,” Bender said.

Maggie Scarborough, research manager for IDC Financial Insights in Massachusetts, said as more companies attempt to automate and improve their audit compliance functions, there is an increase in companies using treasury management software that’s accessed through the Internet.

“Corporations that have to comply with a variety of regulations especially those surrounding the Sarbanes-Oxley Act (the 2002 accounting reform law) are moving to treasury management systems and the most accessible of those systems are those available on the Web,” Scarborough said.

She noted the treasury management software space that Kyriba makes has other competitors including much larger companies such as Sunward, Thomson Financial, and Mysis Banking Systems.

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