Procurement involves buying supplies and services you need to run your business. For the most part, companies still use email and spreadsheets or legacy tools to find the best price and come to an agreement with the supplier. That’s fine as far as it goes, but in a world of growing supply chain issues and just-in-time manufacturing, it seems there has to be a way for more advanced technology to work on the problem.
That’s where Arkestro comes in. It uses automation and intelligence to automatically find the best prices. Today, the company announced a $26 million Series A to help grow the platform.
Company co-founder and CEO Edmund Zagorin says his company specifically uses predictive procurement orchestration, which involves a number of different elements. “We use machine learning, game theory and behavioral science to simulate a procurement process before it starts. We propose prices and commercial conditions to all parties involved. And then we help companies to make agreements with their suppliers very quickly,” he explains.
Ideally, he says that the end result is that all parties involved get what they need. “Suppliers get purchase orders faster. Procurement delivers faster savings and the company ultimately gets the parts and services they need to satisfy their customers,” said Zagorin.
The company works with a network of global suppliers and can help customers find the right one the one for the best price services and offerings.
“Predictive procurement orchestration is really about finding the right balance. It is therefore not a question of too few or too many suppliers. It’s about understanding what meaningful optionality is. So the opposite of low intent procurement is high intent procurement, and we describe that as having meaningful choices in your supplier network, and having the data to understand the business costs and benefits of each choice, then being able to make the optimal choice of those that are available to you for each part, and actually for each order,” he said.
Arkestro is essentially a self-negotiating system. It continues to look for goods or services a business needs until it finds someone who says yes to the price and amount, starting with a list of preferred providers.
Lest you think this is just a production scenario, it isn’t. The software works in those environments, as well as in any company that purchases supplies and services, including software companies like Coupa and Box, which count Arkestro as customers.
The company, originally called BidOps, was launched in 2017 after Zagorin saw the need for this type of software while working as a procurement consultant. The company currently has about 50 employees and is recruiting aggressively.
As he expands the startup, he says building diversity is a key factor in hiring. “We do focus on building a diverse and inclusive team. I think being geographically diverse and remote and flexible helps with that. We have a major engineering center in Atlanta, where we plan to continue expanding, and we make it a priority to consider different candidates for every position we take on,” he said.
Today’s round was led by NEA, Construct, Koch Disruptive Technologies (KDT) and Four More Capital with the participation of seed investors Cervin, Correlation, El Cap, Forum, Illuminate and Tenacity.