GettyImages 686616360

Fairmarkit’s AI-fueled platform enables autonomous procurement sourcing – Technology Flow

GettyImages 686616360

Companies divide their procurement spending into two main buckets. The first is purchases larger than $500,000 depending on the size of the company, some initially $1 million. Anything below that number falls under a category known as “tail spend.” Boston-based startup Fairmarket has been working on a tail spend procurement solution for several years and has built a modern platform with a heavy dose of artificial intelligence to help companies find the best deals when it comes to their tail spend.

Today, the company announced a $35.6 million Series C, the kind of investment that’s been hard to come by in this year’s tough VC environment.

Fairmarket co-founder and CEO Kevin Frechette said the industry has been dominated by legacy players such as Oracle and SAP until now, as he focused on the largest acquisitions with “clunky and manual” systems. He and his co-founders saw an opportunity to innovate around the tail spend space when they launched the company in 2017.

“We’ve really doubled down on being fully owned and a leader in the tail spend management space,” Frechette told Technology Flow. However, the company recognized that larger companies weren’t going to rip and replace those legacy solutions, so they came up with a way to work with them.

“We integrate with their existing procurement solutions. We use AI to identify what they want to buy and match them to suppliers in our marketplace, do competitive sourcing and push the results back into their procurement solution to complete the purchase,” he explained.

AI comes into play in the automated vendor selection process. Companies configure Fairmarkit for factors such as price, stability and vendor diversity, and the system finds the best match for them, a process known as autonomous sourcing.

“We really did [committed to] It is called autonomous sourcing. The idea is that you can completely automate the sourcing process and do it intelligently with data. So it’s not just pulling a request for purchase, it’s automatically recommending [vendors]Automated sourcing and automated awarding [the contract],” he said.

The company has over 100 customers, including big players like British Petroleum, BT Group (formerly British Telecom), Snowflake and ServiceNow (which is a strategic investor in today’s round).

In terms of momentum, the amount spent through the platform has quadrupled in the last 12 months. The startup makes money through SaaS licensing fees, scaling the process as customers spend more through the platform. While he wasn’t specific about other numbers like revenue, the platform’s growth combined with investor confidence suggests the company is headed in the right direction.

The company had 70 employees by the end of 2020 when we spoke to Frechette about his Series B. Today the startup has 135 workers and plans to double it again in the next year. Frechette is committed to building a diverse workforce while building a product that allows his customers to buy from diverse suppliers. Since we last spoke, the company has brought in a head of inclusion and culture.

“So the head of inclusion and culture is responsible for reporting how we’re doing, while also creating programs and engagement, proactively with the team, but also through third-party platforms. [The goal is] To make sure we’re not thinking about it when we are [hiring], but we are also inclusive when people are in the company as we continue to scale,” he said. He admits it is challenging, but they are working hard to build an inclusive culture.

Omars led today’s $35.6 million investment in partnership with existing investors GGV Capital and Insight Partners and new investor HighlandX. The company also received a strategic investment from Customer Service Now.

Leave a Comment

Your email address will not be published.