Tail spending is defined as spending that accounts for the majority of an organization’s transactions, typically around 80%, but only a small portion of the total spend volume, around 20%. Due to the large number of transactions, obtaining goods and services included in tail spend can be a difficult process. Fairmarkit makes things easier with its automated sourcing platform, helping organizations reduce cycle times, boost visibility, find savings, and more. Learn more about Fairmarkit and how it can help control tail spend in the press release below.
Fairmarkit, the automated sourcing platform revolutionizing the procurement of products and services for businesses, today announced a $35.6 million Series C investment, bringing its total funding to date to $78 million. The round was led by OMERS Growth Equity with participation from investors GGV Capital, Insight Partners, HighlandX, as well as a new strategic investment from ServiceNow. The new capital will further fuel Fairmarkit’s rapid growth through strategic acquisitions, increased technology partnerships and product development. The company is optimizing the platform for all sourcing events and plans to add the same level of intelligence to payments, bringing customers closer to fully autonomous sourcing. In addition, Fairmarkit was recently added to the 2022 Inc. list. 5000 fastest growing private companies, ranked 159.
Fairmarkit is an AI-enabled procurement platform built for getting lower dollar, non-strategic purchases, or “tail spend,” more efficiently. Tail spending in an organization can reach 80% of purchases, account for 80% of suppliers and 20% of the budget. Using its SaaS platform, Fairmarkit centralizes supplier data and uses its machine learning recommendation engine to match business needs with relevant suppliers who submit competitive quotes. It reduces traditional manual efforts by offering templates and automating the steps of RFQs, RFPs, and Reverse Auctions, eliminating the need for buy desks. Its platform also integrates with leading ERP systems such as Ariba, Coupa, Oracle, SAP and ServiceNow.
“Our system is specifically built to focus on high-volume purchases that may require long purchase cycles and are largely unmanaged and overlooked by enterprise procurement teams, who traditionally rely on clunky enterprise technology and manual,” said Kevin Frechette, co-founder and CEO of Fairmarkit. “We realize that the current economic climate has placed stress on our customers to do more with less, as every line item is scrutinized for cost savings and every opportunity to drive operational efficiencies is pursued. . This investment will help accelerate the impact of our platform on our customers’ bottom lines.”
According to Forrester, US B2B e-commerce spending will reach $3 trillion by 2027. Companies increasingly rely on automation for better visibility and faster turnaround times for acquisitions compared to continuous adding people. A 2022 Gartner report states that more than half of supply chain organizations will use machine learning to augment decision-making by 2026 and that enterprise spending on e-sourcing is expected to grow at a 14% CAGR.
“Organizations are being forced to rethink global supply chains and find innovative solutions to complex procurement challenges today more than ever,” said Warda Shaheen, Director, OMERS Growth Equity and newly appointed Fairmarkit Board Observer. “Fairmarkit offers a solution that enables businesses to be more efficient and achieve disciplined spending, which is essential to long-term growth and survival. We are proud to lead the company’s Series C round and are excited to partner with Kevin Frechette and the Fairmarkit team in the next phase of growth.”
Over the past year, Fairmarkit customers’ spending on the platform has quadrupled, and they are on track to complete more than 200,000 competitive sourcing events this year. In addition, Fairmarkit’s go-to-market partnerships with Accenture, Capgemini, Ernst & Young, Hackett Group and KPMG have contributed to this exponential growth.
Today, the company serves more than 50 businesses, including BP, British Telecom, Cabot Corporation, Emirates Flight Catering, Vattenfall, Refinitiv, and Snowflake. Fairmarkit customers have experienced 10%+ savings in purchases and 60%+ reduction in manual efforts. To meet growing demand, the platform has added multiple languages and enhanced customer support functions for continued ease of use worldwide.
“Customers rely on ServiceNow as a robust platform for a rapidly changing world,” said Philip Kirk, Senior Vice President of Corporate Business Development at ServiceNow. “This investment is a natural extension of our commitment to transform procurement and supplier operations across the enterprise. As integration partners, ServiceNow and Fairmarkit already help accelerate delivery times for supply chain requests. sourcing through digitization and self-service digital workflow automation. We will continue to innovate to help customers win.”
Co-founded in 2017 by CEO Kevin Frechette, COO Tarek Alaruri, and CTO Victor Kushch, Fairmarkit is headquartered in Boston, MA with offices in New York and Poland. Since its Series B investment in 2020, Fairmarkit has doubled its workforce with more than 120 current employees worldwide. The company continues to expand its team and hires in all departments.
The full press release can be found on Business Wire.
Spencer Hulse is a news desk editor at Grit Daily News. He covers startups, affiliate, viral, and marketing news.