Arkestro brings game theory and machine learning to shopping with $26M investment – TechCrunch
Procurement is buying the supplies and services you need to run your business. In most cases, companies still use email and spreadsheets or legacy tools to find the best price and come to an agreement with the supplier. That’s fine as far as it goes, but in a world of growing supply chain and just-in-time production issues, it seems like there should be a way to put more sophisticated technology in to solve the problem .
It’s there that Arkestro It uses automation and intelligence to automatically find the best prices. Today, the company announced a $26 million Series A to help continue the platform’s growth.
Company co-founder and CEO Edmund Zagorin says his company specifically uses “predictive purchase orchestration,” which involves a number of different elements. “We use machine learning, game theory and behavioral science to simulate a procurement process before it begins. We offer pricing and commercial terms to all parties involved. And then we help companies to close deals with their suppliers very quickly,” he explained.
Ideally, he says the end result is that all parties involved get what they need. “Suppliers receive purchase orders faster. Procurement saves money faster and the company eventually gets the parts and services it needs to satisfy its customers,” Zagorin said.
The company works with a network of global suppliers and can help customers find the right those at the best price to maintain services and supply levels.
“Predictive purchase orchestration is really about finding the right balance. It is therefore not a question of having too few or too many suppliers. It’s about understanding what a meaningful option is. And so the opposite of a low-intent purchase is a high-intent purchase, and we describe that as having meaningful choices in your supplier network, and having the data to understand the business costs and benefits of each choice, then be able to select the optimal choice of those available to you for each part, and really for each purchase order,” he said.
Arkestro is essentially an auto-trading system. He will keep looking for goods or services that a business needs until he finds someone who says yes to price and amount, starting with a list of preferred suppliers.
Lest you think this is just a fabrication scenario, it’s not. The software works in these environments, as well as in any company providing supplies and services, including software vendors like Coupa and Box, which Arkestro considers customers.
The company, originally called BidOps, was launched in 2017 after Zagorin saw the need for this type of software while working as a procurement consultant. The company currently has about fifty employees and is actively recruiting.
As he grows the startup, he says diversity is a big factor in hiring. “We are focused on building a diverse and inclusive team. I think geographic diversity, remoteness and flexibility help with that. We have a major engineering center in Atlanta, which we plan to continue to expand, and we make it a priority to consider diverse candidates for every position we hire,” he said.
Today’s round was led by NEA, Construct, Koch Disruptive Technologies (KDT) and Four More Capital with participation from startup investors Matterhorn, Correlation, El Cap, Forum, Illuminate and Tenacity.