Procurify
Procurement for Dummies
Founded: 2013
Founders: Aman Mann — CEO, Eugene Dong — CTO, and Kenneth Loi — COO
Subsidiaries and consortia:
Estimated Total Funding:
2014: $1.2MM Seed round from Nexus Ventures, BDC, Anand Periasamy and Mark Cuban
2015: $4.0MM Seed round from Point Nine Capital, Nexus Venture Partners and the Business Development Bank of Canada (BDC), Hootsuite’s CEO Ryan Holmes and its chief revenue officer Steve Johnson
2016: $7.0MM Series A round from Runa Capital, Point Nine Capital, Nexus Venture Partners and the Business Development Bank of Canada (BDC)
Valuations:
Cap Table:
Employees: 50
Patents: 0
Growth History:
2012: Growlab Accelerator Program
2014: 13 employees
2015: 500MM+ of purchase orders on platform, 300% growth in user base from over 50 countries, 400% increase in annual recurring revenue. Upgraded offering with a new user interface and added an accounts payable solution.
2016: Launched integration with Slack, 250% growth in net new revenue and a 500% increase in new revenue from existing clients through account expansion, 100 countries worldwide, 40 employees
Products
Procurify provides a cloud-based procurement software with web-based and app-based (iOS and Android) user interface. The Android app has been installed on 1000–5000 devices. The platform allows users to create, track and report on all requisition, purchase orders, and expenses. A role-based system is employed, whereby certain users can be set up to approve purchases up to a certain limit. If these limits are exceeded the purchase would be sent for approval to a user with a higher limit.
The platform is designed like a typical online shopping experience, in order to minimize the learning curve and increase adoption. Requests, approvals, and purchases can be made from any internet connected device. All of the transactions are updated in real-time and can be analyzed through instant reports.
Procurify’s in-app messaging and notification system stores all communication centrally and can be integrated with Slack through a ProcurifyBot. Real-time notification can be directly posted to Slack or send to emails, saving users time and leading to quick approvals. Users can be tagged to specific products through a “Mentions” feature, creating custom teams and discussions around a given procurement.
The Procurify Exchange (PEx) marketplace is a buyer-supplier marketplace that connects Procurify users with vendors and suppliers. This allows suppliers to add their catalogs to specific buyer’s requests.
Procurify aims to deploy solution within a week and will link their system to any accounting/ERP system (i.e NetSuite, QuickBooks, Sage, Dynamics, Xero).
The platform is hosted on the cloud and is fully scalable to meet needs of any organization. The cost of using the system is a one for all $45/per user per month.
Procurify target market is companies with 50 to 1000 employees with 10% to 20% of those employees having user accounts.
The product has a great online presence with very good reviews, blogs, social platforms, training, support, and customer participation.
Major Customers
Hootsuite
Cornell University
University of Maryland
GardaWorld
Berkshire Hathway
Team
Procurify is the first business for the three founders, they have hired Angela Baldonero as the COO in order to provide them with leverage and complement their lack of experience. Angela brings over 10 years of leadership experience from various industries. The Board is compromised of Mark Cuban, Ryan Holmes, Anand Babu Periasamy and Steve Johnson who bring a lot of valuable experience in growing startup businesses.
Market Opportunity
Purchasing has been growing exponentially over the last years and is expected to continue the growth.
Global commercial consumption expenditures reached $110 trillion in 2011 with small and medium businesses accounting for 50% of the total expenditures. This is Procurify’s target market segment.
Software as s Service (SaaS) is expected to continue its high growth profile in the next few years having reached $21 billion in sales for 2015. Procurify solution is based on a SaaS cloud-based approach.
In the last few years, supply chain management (SCM)represented only 3% of the SaaS market giving its lots of room for growth.
SaaS in the SCM is expected to achieve a 19% growth in the next few years, reaching $4 billion in size according to Accenture.
Gartner has forecast SCM Software revenues to reach $13 billion by 2017.
Procurify has positioned itself to capture the growing market of SaaS as companies move from traditional installed software towards cloud solutions. Small to medium enterprise are able to save time and implementation costs by switching their procurement to Procurify’s solution. While employees are provided with an easy to use interface, similar to what they see when the shop online. The real-time nature of the system allows managers to see live budgets rather than waiting until end of the month, giving them additional value from the extra visibility.
Competitors
Coupa provides a cloud-based spend management software platform. It has connected more than 2 million suppliers worldwide and simplifies expense management, procurement, inventory, contract management and invoicing. In October Coupa has gone public with a current market cap of $1.6 billion, current revenues of $170 million and 460 enterprise customers. It has been ranked as one of top growth companies in North America.
Tradeshift provides a cloud based marketplace for connecting buyers and sellers and helping companies to improve invoicing, workflow and supplier financing processes. It has signed up 800,000 companies. It is free for suppliers and allows for paperless invoices, procurement, payables and supplier management. It has been valued at around $600million in the latest funding round.
NetSuite is one of the top ERP providers. It has a purchasing module which is more suited for accounting purposes than for front-line personnel. It is not as easy to use as other offerings and has a higher cost per user. However, with being the top ERP provider, it should be able to adapt its product for ease of use.
Procurics provides a cloud-based procurement platform that manages requisitions and purchase orders. It has created a marketplace where buyers can search for new suppliers. It has priced its solution at $55/user/month to buyers, with sellers being able to list their catalogs for free.
Precoro (formerly TOPES), is an Eastern Europe-based ePurchasing platform, that manages purchase orders, approval processes and catalog listings. It has priced it solution at $40/user/month
Rubberstamp.io provides a simple purchase order management tool with approval functionality. It has priced it’s solution at $99 per month up to 5 users.
Supplibase provides s a cloud-based marketplace for connecting buyers and sellers. It provides search capabilities where buyers can find suppliers. Suppliers need to pay in order to promote and list their services.
Ivalua provides web based spend management and enterprise procurement solutions. It has 200+ customers in 70 countries, with 165 billion value of requisitions under management.
Wax Digital, develops an eProcurement software that provides on-demand purchase-to-pay and sourcing solutions for businesses both as a cloud-based or a modular system. Their solution provides cost control, compliance and contract management.
Vroozi is a cloud-based mobile procurement platform that offers procure-to-pay, workflow approval, master data,content management, catalog solutions. The system can be managed through a mobile device and has monthly subscription based pricing.
SpendMap is a software that automates Purchasing, Payables and Materials Management. It offers SaaS and standard software packages.
Bellwether Software offers procurement software and online spend management solutions for small and mid-sized organizations. It provides solution streams. One for companies that want a simple to use solution, and the other a full featured package with invoicing, asset and contract management.
Tradogram provides cloud-based procurement software for supplier negotiation. It automates requisitions, creates POs, posts RFQs/RFPsand manages contracts. Has a free pricing plan for only 1 user and a $10/user/month enterprise plan which includes budgeting and approval tools.
Aquiire is an e-procurement suite that provides real-time shopping, supplier management, and business intelligence solutions. It’s a marketplace platform currently, has 250,000 users in 170 countries.
SMART by GEP develops procurement software and purchasing suite. It is a full suite of products ranging from source-to-pay, project management, and budgeting.
Basware is an ERP solution with modules for purchasing, invoicing and financing solutions. It can be delivered as an add-on to current ERP systems or as a mobile solution. It’s a public company with 120million of revenue, 520 million market cap and over 1,500 employees.
Conclusion
Procurify has a good product that is meeting the demand for easy to use cloud- based procurement software. The product offers a variety of savings to businesses and is affordable. However, Procurify is fighting against a large number of competitors. Some of the competitors are big established ERP companies that are adjusting their offerings into SaaS, while others are startups that saw an opportunity to fill an unmet demand. Some of the competitors are offering similar offering at cheaper prices while others have a more wholesome feature set. Procurify falls in the middle of the product offering, aiming to be cheaper than ERP solutions, but providing an expanded feature set to address customer demand.
The market is growing and Procurify should be able to capture a portion of the market as long as it is able to expand is customer base and adapt to their needs. Based on its SaaS experience in SCM, Procurify should be able to expand its offering to other SaaS growth areas as it matures.
SaaS SCM companies seem to be in vogue currently achieving high valuations and profitable exits.
I believe that Procurify is a good investment, addressing a need in a growing market with a good prospect of exit down the road.
