Consumers today enjoy seamless shopping experiences thanks to platforms like Amazon and Instacart, which aggregate suppliers and help us make informed purchasing decisions based on cost, delivery speed, and reviews. If we can place an order for milk and eggs from Safeway, laundry detergent from Costco, and a bottle of perfume from Sephora under one platform in less than 10 minutes, then why does a comparable order take enterprise procurement teams weeks or even months to complete?
Procurement teams play the critical role of ensuring that businesses have the raw inputs and services required to operate and deliver end products to customers. For a car manufacturer, this could be the tires and steel that make up a vehicle; for a software company, it could be the office supplies and computers that employees use daily. Regardless of industry or size, every business has a procurement function that helps unlock cost savings, reduce supply chain risk, and ensure supply meets demand. Supply chain globalization over the past 20 years along with recent geopolitical tensions and the COVID-19 pandemic have made procurement more complex, more challenging, and more mission-critical than ever before. Forward thinking leaders no longer view procurement organizations as a cost center but rather a strategic business partner that directly drives topline revenue, delivery times, customer satisfaction, and business reputation as they manage new variables including labor shortages, logistics, sustainability and carbon emissions, supplier diversity and practices, extreme weather, and evolving trade policies.
Despite growing complexities in the global supply chain and significant advancements in technology, most procurement organizations still operate in the same way they did decades ago, with most transactions being relationship-driven and insights remaining trapped in spreadsheets, email threads, and phone calls. Creating an RFP, delivering it to the right suppliers, managing negotiation, and ultimately selecting the right vendor based on a variety of factors are all extremely manual and oftentimes subjective. Through our conversations with dozens of procurement leaders, we learned the struggle is ubiquitous across industries. While solutions exist to simplify aspects of their work, none have been successful in addressing all types of spend and capturing the full spectrum of procurement activities with an approach that generates measurable business impact.
At NEA, we have backed many visionary entrepreneurs and industry-defining companies that fundamentally improved the way people work, such as Salesforce, Workday, and Cloudflare. Modern tools have empowered product teams to build innovative solutions, sales departments to better attract customers, and HR leaders to optimize workforce management. While we’ve had our eye on the procurement space for a while (we invested in sourcing streamline platform Scout in 2014, later acquired by Workday), we believe that now there’s an even greater opportunity and more urgent need to transform the way enterprises purchase materials and services that are essential to their products and businesses. When we met Arkestro, it was clear to us that they had built a powerful, differentiated product capable of tackling the challenges procurement teams face today.
Arkestro provides a Predictive Procurement Orchestration platform that generates suggested pricing for the sourcing project, automates RFP creation and supplier negotiations, and recommends the best supplier. During this process, suppliers never have to log onto the platform and can transact directly in email, while also gaining real-time insights into their likelihood of winning the bid and where they are falling short. Unlike existing solutions that focus on indirect spend, Arkestro differentiates itself by addressing all spend categories (direct and indirect spend, Capex, MRO, logistics), supporting line item-level granularity for sourcing projects, and leveraging AI, machine learning, behavioral science, and game theory to generate cost and time savings. The platform learns from historical and real-time transaction data and provides even more customized user experiences over time. On average, customers see a 2-5x savings impact while maintaining quality and SLA requirements. In addition to its core sourcing capabilities, Arkestro provides supplier management, supplier diversity analytics, and integrations with all major ERP, business intelligence, procure-to-pay, and identity platforms to serve as a one-stop-shop for all procurement activity.
As we spent more time with Arkestro’s co-founders Edmund Zagorin and Rob DeSantis, we grew confident in Arkestro’s ability to attract top-tier talent and execute on their ambitious vision. With Edmund’s deep domain expertise and Rob’s vast GTM experience scaling Ariba to $250M in revenue in just 4 years, Arkestro has attracted forward-thinking customers such as BASF, Box, Bel Brands, Holman Enterprises, and Dover Chemical Corporation who are eager to unlock the full potential of procurement. Procurement teams need a comprehensive, modern platform that helps them gain full visibility and control of all sourcing activities, automate time-consuming tasks, and deliver strategic projects that lead to strong top and bottom line results. We are excited to partner with Edmund, Rob, and the rest of the Arkestro team as they amplify procurement’s impact within organizations and help drive tangible business outcomes.