Procurement is the purchase of consumables and services that you need to run your business. For the most part, companies still use email and spreadsheets or older tools to find the best price and reach an agreement with the supplier. That’s fine so far, but in a world of growing supply chain problems and just-in-time production, there seems to be a way to use more sophisticated technology to solve the problem.
This is where Arkestro comes into play. It uses automation and intelligence to automatically find the best prices. Today, the company announced a $26 million Series A to fuel the growth of the platform.
The company’s co-founder and CEO, Edmund Zagorin, says his company specifically uses “predictive procurement orchestration,” which encompasses a number of different elements. “We use machine learning, game theory, and behavioral science to simulate a sourcing process before it begins. We propose prices and terms and conditions to all parties involved. And then we help companies make agreements with their suppliers very quickly,” he explained.
Ideally, he says, the end result is that everyone involved gets what they need. “Suppliers receive orders faster. Procurement yields faster savings and the company ultimately gets the parts and services it needs to keep its customers happy,” said Zagorin.
The company works with a network of global suppliers and can help customers find what’s right those at the best price maintain services and levels of care.
“Predictive procurement orchestration is really about finding the right balance. So it’s not about getting too few or too many suppliers. It’s about understanding what meaningful optionality is. So the opposite of low-intent purchase is high-intent purchase, and we describe this as having meaningful decisions across your network of suppliers, having the data to understand the business costs and benefits of each choice, and then being able to to be able to select these for each part and really for each order the optimal selection from those that are available to you,” he said.
Arkestro is essentially a self-negotiating system. It will continue to look for goods or services that a business needs until it finds someone who says yes to the price and quantity, starting with a list of preferred vendors.
Lest you think this is just a production scenario, it’s not. The software works in these environments, as well as any company that procures supplies and services, including software companies like Box, which Arkestro counts among its customers.
The company, originally called BidOps, was founded in 2017 after Zagorin saw a need for this type of software while working as a procurement consultant. The company currently has around 50 employees and is hiring aggressively.
As he expands the startup, he says building diversity is an important factor when hiring. “We are focused on building a diverse and inclusive team. I think it helps to be geographically diverse, remote and flexible. We have a large engineering center in Atlanta that we’re looking to expand, and we make a point of considering different candidates for each position we hire,” he said.
Today’s round was led by NEA, Construct, Koch Disruptive Technologies (KDT) and Four More Capital, with participation from seed investors Cervin, Correlation, El Cap, Forum, Illuminate and Tenacity.