Focal Point focuses on modernizing procurement with $3M seed investment

Focal Point founder Anders Lillevik has spent more than 25 years in procurement, where he has observed that the vast majority of business was still being conducted using spreadsheets and email. He saw an opportunity to modernize an industry desperately in need of digitization by applying the power of open APIs to get at data often locked away in various enterprise systems.

He says the idea for his startup really came into focus when he was working as a consultant helping a client select procurement software. They were spending $1.5 million, yet would still be doing most of the work in Excel and email. Nothing was really changing in spite of the significant investment.

He saw a different way and set about to build a company to deliver it. Today, his startup announced a $3 million seed investment to help build the platform he envisioned, one that would bring a level of automation to a highly manual process.

“So essentially, what we do is we take all the data that sits in the underlying systems and bring them together. That in and of itself is not necessarily unique, but what we do is we make that data available as part of workflows. So we have that data integration layer, and then we have a process layer that allows users to set up their own workflows and processes with the data available to them,” Lillevik told TechCrunch.

He said that this approach eliminates the need to log into multiple systems to find information and record it in the dreaded spreadsheet. “All reporting comes out of the box, so it becomes a much better user experience with all the information available at your fingertips rather than having to swivel chair it from system to system, then copy and paste into Excel and email.”

The system can help find suppliers that meet a specific set of requirements, whether technical, environmental, diversity or whatever. The customer can create a workflow and Focal Point can then present the user with a set of suppliers and then help send out RFPs, process them and eventually award the business.

Procurement officers can track all of this activity across their organization with analytics that help them understand where different items are in the buying process and what is being spent.

Lillevik launched the company in 2020 and raised a $679,000 pre-seed investment from Surface VC, Techstars and various angels in 2021, which he put to work to build the first version of the software last year. He has a handful of large customers using the software, and reports a healthy pipeline.

He started building the software with a small group of Ukrainian developer contractors in 2021, and today has 21 employees, four of whom he recently hired. He’s putting the brakes on hiring for the rest of the year while he sees how external economic conditions play out.

He says that diversity is something that’s near and dear to his heart. He points out that the company is a disabled-owned business. “So having an eye for diversity is something that we always have. Our dev team is actually still in the Ukraine. It’s just they’re our developers now, and the complement there is fairly diverse. And I would say that at least half of our team onshore here in Atlanta is also diverse. So we are looking to hire the best talent, the best available [employees] and, of course, we have to have an eye towards diversity also. But they’re not mutually exclusive,” he said.

He reports that his Ukraine-based team is safe at the moment but some members have had dangerous experiences, having to evacuate from shelling, and he helped his employees get to safety, a job he takes very seriously.

In terms of raising at a time when VC dollars are tightening, he sees his solution helping procurement teams find better deals in a more efficient way, something that should remain attractive regardless of economic conditions.

Today’s $3 million seed came from a group of investors including Susa Ventures, Amplo, GoPoint Ventures, Bungalow Capital and Operator Partners.