What’s our definition of a SaaS enabled marketplace?From our point of view, a SaaS enabled marketplace is a business which combines the characteristics of both models:
- A marketplace component that connects two or more parties to conclude a transaction and thus can generate benefit from real network effects.
- A SaaS (Software as a Service) component that offers software features to one — or more — of the parties. This SaaS component needs to be usable as a standalone software. This is how we differentiate pure marketplaces (like Uber) from SEMs like StyleSeat.
SEM LandscapeWhen we set ourselves the goal of mapping out the SEM landscape, we first and foremost embraced the process and the exercise. It was clear from the start that we couldn’t come up with an exhaustive list of all existing players in every vertical. Our main aim with this post is to give the community a first overview of the main SEM verticals and players, as well as sharing some lessons we have learned. We’re planning to update our map in the months to come, in the meantime if you want to get on our radar just fill out this form:
SaaS born, marketplace born or native SEM?A first observation we made while mapping this ecosystem is that there are 3 scenarios when it comes to SaaS enabled marketplaces:
- The company is SaaS born and the marketplace component is added after.
- The company is marketplace born and the SaaS component is added after.
- The company is SEM born.
- More and more traditional SaaS players have reached a critical mass of users and can add marketplace features more easily now. E.g Atlassian which recently enabled Jira users to hire freelancers within the project management tool.
- More and more marketplace operators add SaaS features to help their buyers / sellers manage better their business, sometimes even outside of the transaction loop. E.g: DOZ started as a pure marketing freelancers marketplace and it offers now a complete project management tool.
- As this hybrid model becomes commonplace an increasing number of startups launches native SEM products.
A fragmented landscapeAnother interesting finding is that for some verticals it was extremely easy to find SaaS enabled marketplaces while for some others it was very challenging. In general, we found more players in verticals that were already mature in terms of pure marketplace and SaaS players. Allow us to clarify that point with some examples. For instance, we had no problem finding SEMs for the “Travel & Tourism” or for the “Professional Services” verticals. If you want to book a flight, a hotel or want to find a plumber there’s a high chance that you’ll first search online. And this search will probably lead you to a comparison engine, a booking marketplace or an online listing. In these instances going online and browsing listings has become a habit for both users and professionals. There’s no market education to be done. The more mature a vertical has become, the more competitive it gets and the more pressure there is for suppliers to perform well. In such environments the SaaS enabled marketplace model very often emerges to help them perform better. For example many of the SEMs we’ve listed in the two verticals mentioned above offer professionals not only plenty of features to manage their bookings (from simple calendars to complete booking systems) but also marketing features with ranking optimization, dynamic pricing, yield management, off- and on-platform-promotion etc. and even CRM or invoicing features. Providing just an online listing is not enough, established marketplace operators must provide additional added-value through a SaaS-component. At the other end of the spectrum some industries, like Agriculture or Construction, haven’t (yet) reached the same level of maturity and we couldn’t discover as many SaaS enabled marketplaces. To that end, the SEM model seems like a natural evolution of the marketplace and SaaS models which are “merging” their strengths into the same product.
SaaS component: B2B vs B2C vs C2COn our map you’ll find every type of SEM possible: B2B, B2C and C2C. Concerning the SaaS component there are 2 main aspects that we want to highlight:
- The SaaS component is generally much lighter for consumers (“C”) than for businesses (“B”).
- In most cases the SaaS features are built for the supply-side of the marketplace rather than for the demand-side.
A notable exception to this situation is when these consumers are on the “supply”-side of the marketplace (the first “C” of C2C marketplaces), then they need SaaS-features to manage the good or service they sell. For example Livementor is an education platform that enables anybody to give online classes and hence offer a tool, in parallel of their marketplace, that helps tutors better manage their activity. Which leads us to the second aspect — in most cases the SaaS-features we identified were built for the “supply”-side of the marketplace for use cases like:
- Booking management: service or venue providers benefit from an integrated booking system (booking, real time availabilities, waiting list, analytics…) sometimes combined with CRM features.
- eCommerce management: a wide variety of features enable sellers not only to manage the transactions on the marketplace (order management, shipping…) but also their stock (Amazon Marketplace), their marketing (dynamic pricing, ranking optimization, promotions, vouchers etc…) and more.
- Supply management / procurement: mainly for B2B marketplaces which connect businesses with suppliers (ex: Quartzy).
- Specialized features: like Livementor’s dashboard for online tutors or DOZ’s project management tool for marketers.