ScoutRFP Raises $33M
Thanks to Xconomy
ScoutRFP, whose software is designed to help businesses streamline the process of ordering goods from suppliers, announced that it raised $33 million in a Series C fundraising round led by Scale Venture Partners.
San Francisco-based Scout, part of a tech sector dubbed supplier relations management, or SRM, aims to free businesses from painstaking traditional methods of seeking bids from various suppliers and comparing their merits. Some companies are still doing this by laboriously creating spreadsheets to evaluate supplier proposals, Scout CEO and co-founder Alex Yakubovich says.
Instead, Scout customers submit orders, specifications, and the names of suppliers to Scout, which invites the suppliers to enter their responses into its system. Customers can then scan across multiple factors such as price, quality, reliability, and data security to pick the winning bid. The system manages spending of more than $20 billion, the company says.
Among the selling points of such software: Automated sourcing can save time for company procurement teams; may deliver cost savings on purchases when those teams can efficiently consider all offers; and could speed the ordering process for goods needed quickly.
Scout has attracted 175 customers spanning a range of industries, including coffeehouse retailer Starbucks (NASDAQ: SBUX), pharmaceutical company Gilead (NASDAQ: GILD), enterprise software company VMware (NYSE: VMW), packaged foods supplier Conagra (NYSE: CAG), and customer relations software (CRM) company Salesforce (NYSE: CRM). Those 175 Scout customers, located across 117 different countries, all pay annual subscription fees for the software at rates based on the number of users per company and the features included in the package of services they choose, Yakubovich says. More than 156,000 suppliers submit bids through Scout, which does not charge fees to the suppliers, he says.
Founded in 2014, Scout has now raised a total of $60.3 million. Joining Scale Venture Partners in the Series C funding round announced Tuesday were earlier investors Menlo Ventures and NewView Capital, as well as new strategic investors Workday Ventures and Salesforce Ventures. Yakubovich declined to disclose the valuation agreed on for Scout under the investment round.
Scout plans to use its new capital to continue product development, scale up sales and marketing, and extend its reach in business sectors including healthcare, manufacturing, biotechnology, pharmaceuticals, and financial services. Yakubovich says Scout may double its staff of 105 employees.
In addition to the new investments by the corporate venture investment arms of Workday and Salesforce, Scout is poised to collaborate with those two companies to help enhance services for customers they have in common, and attract further business, Yakubovich says.
Scout is competing in a supplier management and procurement software sector that includes San Mateo, CA-based Coupa, which offers business spending management software, and Web-based procurement software unit SAP Ariba, based in Palo Alto, CA. Ariba, founded in 1996, was one of the earliest startups in the field. It was acquired by enterprise application software company SAP (NYSE: SAP) in 2012.