To buy AI tools, or to build them in-house? That is the question.

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At the end of July, Microsoft-native AI ERP platform Vena Solutions announced it would acquire agentic data startup Morpheo AI—like Vena, a Toronto-based company. Vena CFO Melissa Howatson said that what first began as a partnership turned into “a great opportunity for us to bring [Morpheo AI] in-house” to strengthen its own internal AI engine capabilities.

Build option? Why buy? For Vena, the acquisition “was about the time it was going to save us and how much it was going to advance our product roadmap…with what they’ve already built.”

“Could we build it? Yes; it would take time, and it would take some additional talent. And [Morpheo] had both. They already know the space, and they have great, deep data expertise rooted in financial services,” Howatson told CFO Brew.

Why care about their expertise in financial services? “Financial services was an ideal proving ground because it combines enormous data complexity with virtually no tolerance for error,” Howatson added over email. “The team had to build technology capable of working across large, fragmented data environments while meeting an extremely high bar for accuracy. This was largely because in finance, even a decimal-point error in something like a variance can make the answer unusable.”

Kicking the tires. Morpheo AI was Vena’s second acquisition this year. It announced its plan to purchase Acterys, a Power BI-based planning and app development platform, in February. Due diligence on the acquired products was at the center of both deals.

“In this case, we certainly used third-party code scanners, and companies that could look over and make sure that that was looking good,” Howatson said.

“And we also used some experts in AI, outside of us, to take a look at the code and take a look at what it was doing, and just validate that our thesis was right in terms of what we thought of how it was built. Obviously, whenever you’re buying technology, there’s what you think it is, and then there’s the actual getting underneath the covers and looking at what’s there.”

Investor advice. Howatson said ongoing conversations with board members, including some of Vena’s investors, was part of both acquisitions. (Vista Equity Partners, JMI Equity, and Centana Growth Partners were among Vena’s Series C investors in 2021.)

Being able to leverage the knowledge, and sometimes networks, of those investors and board members is something Howatson said was and is a huge benefit. “We have the benefit of having such strong investors who’ve done this so many times, they’ve made so many acquisitions before, so we don’t have to learn everything the hard way doing it ourselves,” she said.

“When we can tap into knowledge that they have and make sure we’re thinking about things and have addressed all of the areas that we should have, and we do checkpoints with them,” Howatson said.

“‘Here’s what we’re thinking. Here’s what we think the return looks like.’ They’ll give us questions, things to go back and look at, and then as we learn through the process of due diligence, we’ll keep them informed.”