By Ravi Mohan, Managing Director, Shasta Ventures
There probably aren’t many people that can say this, but procurement is a space that’s interested me for a long time. I’ve made a number of investments in the space over the years and continue to be excited by the opportunities that help companies buy more effectively. A strong belief in the impact technology can have in this arena is why Shasta Ventures led a $10.3 million Series A investment in Suplari, an AI-driven insights platform for procurement — aka a smart application that helps companies ensure they buy products and services from the right suppliers at the right price and stay within the budget drawn up at the beginning of every fiscal year.
I got into the venture business just as the web was starting to change how business was done. Pre-web procurement used to be a manual process rife with inefficiencies in terms of how companies could enforce that the contracts that they negotiated with suppliers to get better deals were consistently used by employees. The first blob of expenses that companies could achieve savings from were indirect spend that employees could control — the money spent by individuals on office supplies, travel etc. The first wave of successful companies, Ariba (indirect spend at the employee desktop) and yes that was pre- mobile as well as Concur (employee travel and expense at the desktop). I missed those companies and quickly moved to finding companies focused on direct spend — the cost for the parts and components inside the product you buy. An example of direct spend for Tesla is the cost of the steering wheel bought from a supplier like Plastikon (Plastikon makes steering wheels in Hayward and maybe Tesla’s supplier). I invested in SupplierMarket, which was subsequently acquired by Ariba for a nine-figure sum in 2000. Today, I’m excited about Suplari, its breakthrough platform, its passionate team and the company’s potential to create the smart enterprise application for procurement.
The potential for automating procurement was clear back in 2000, but the benefits to businesses took longer to manifest. Now that enterprises have adopted many different systems to manage procurement and have created numerous sources of information, the time for Supari has come. Anticipating this need, Suplari built a platform that can analyze millions of data points from across disparate systems – budgeting, contracting, purchasing, accounts payable, T&E and corporate card accounts — to provide a real-time, unified view of procurement. The system leverages AI technology to deliver actionable insights around costs, risks, and compliance. Basically, it can match usage to spend across an enterprise and uncover opportunities for savings and efficiency. It’s a boon for CFOs and Procurement Officers.
When I met with Suplari, what immediately struck me about its CEO and cofounder Nikesh Parekh was his understanding of procurement. He had developed a deep understanding of the space and the people in it very quickly. I had also worked with members of Suplari’s technology team — Brian White and Jeff Gerber — before when they were at iConclude and was impressed by how they built a great product with a small amount of capital. The team was fantastic, which is something we always look for at Shasta. With Suplari, the team has delivered a superior product experience that is elegant and squarely addresses their customers’ pain points.
Currently the SaaS investments I lead at Shasta center on “smart applications,” — applications combine data from disparate sources with processing power to enable computers do the work to assist or enhance decision-making. SaaS 1.0 involved taking client-server applications and re-implementing as a cloud applications. SaaS 2.0 isn’t just about making applications that are usable. It’s about making them better by making them smarter. This is exactly what Suplari does. The procurement space is ripe for change. As existing enterprise cloud applications enter the replacement cycle, they will be replaced by a new wave of smart applications. Based on this great team that really understands their customer and has built an exceptional product experience for them, I’m betting Suplari will be the leading player in procurement in 2025.