Lease accounting software provider LeaseQuery announced Tuesday that it purchased software-as-a-service management startup Stackshine in a bid to expand into a growing market.
The deal positions Atlanta, Georgia-based LeaseQuery to help clients with reining in SaaS spending — a mounting challenge for both corporate IT and finance teams, the company said in a press release. SaaS spending continues to grow by 15% to 20% annually for businesses of all sizes, it said.
“We have the opportunity to help our current customers with a big problem,” Chris Ramsey, LeaseQuery's chief strategy officer, said in an interview. He declined to disclose the financial terms of the acquisition.
Out-of-control SaaS spending at many companies is putting a strain on corporate IT and finance departments, according to a February study by Big Four accounting firm KPMG.
“The rush to the cloud has led to excess spending and insufficient oversight, leaving many organizations struggling to balance the value of cloud agility and innovation against the need for guardrails to control costs,” the KPMG report said.
With the cloud, software consumption is decentralized, making it difficult for finance and IT departments to exert control over the costs, KPMG said.
The average company spends more than $343,000 annually on SaaS subscriptions, making it the largest cost other than payroll and real estate, according to the LeaseQuery release. Organizations that lack centralized visibility can struggle to budget accurately for and control their SaaS costs, leading to at least 25% in overspending through 2027 due to excess licenses or overlapping tools, it said.
“We are committed to making our customers’ lives easier by simplifying the complex, and our acquisition of an innovative SaaS spend management platform allows the office of the CFO to address another significant pain point regarding one of their largest areas of spend outside of leases,” LeaseQuery CEO George Azih said in the release.
Founded in 2019, Stackshine offers a platform designed to help companies easily track their software spending and usage.
LeaseQuery decided last year to look at the SaaS management market for a potential investment opportunity after an evaluation process that included interviews with customers and industry experts, Ramsey said.
"During that process, we found Stackshine and then got to know them better as a team,” he said. “And instead of just acquiring the product as we did for two previous acquisitions, we really liked the team, so we said, ‘Hey, we actually want to bring on the whole company.’”
The acquisition, which closed last week, allows LeaseQuery to offer SaaS management services for the first time. Until now, the company was narrowly focused on addressing challenges in the lease accounting space through automation.
The completed transaction “helps us bring more information to the office of the CFO that they can act on to have real savings quickly,” Ramsey said.