Companies are increasingly struggling with procurement — the strategic process of acquiring goods and services to execute tasks across the organization.
According to a recent survey from procurement network Procurious and Ivalua, a provider of spend management solutions, 32% of procurement teams admit to having “cut corners” under executive pressure to respond to challenges “more quickly and effectively.”
Aiming to help companies overcome some of these blockers, three entrepreneurs — Sudhir Bhojwani, Lalitha Rajagopalan and Yuan Tung — founded Oro Labs, a platform designed to orchestrate procurement and supplier management flows across disparate systems and data.
Now, there’s a lot of competition in the market for procurement management software, which one analysis estimates will be worth $13.80 billion by 2029 — up from $6.15 billion in 2021. Oro has rivals in Levelpath, Pivot, Pando and Zip, to name a few. And several incumbents are beginning to encroach on the space, like Ramp, which recently said it would launch procurement tools, services and products aimed at enterprise-level customers.
But Oro appears to have investors convinced of its growth prospects.
Oro today announced that it raised $34 million in a Series B round led by Felicis, with participation from Norwest Venture Partners, B Capital and XYZ Venture Capital. Bringing Oro’s total raised to $60 million, the funds will be put toward scaling up Oro’s operations and customer base and developing a “range of new use cases” for the Oro platform, Bhojwani, Oro’s CEO, said.
“Oro strategically elected to build its initial offering as a workflow platform as opposed to a standalone product, allowing companies to adapt usage to a range of business challenges, from procurement to things like supplier fraud prevention, invoicing and more,” Bhojwani told TechCrunch in an email interview. “Oro is already working with a number of Fortune 200 customers on solving these and other supplier challenges.”
Bhojwani, Rajagopalan and Tung co-launched Oro in 2020 after working together for several years at SAP Ariba. While there, Bhojwani says that they became attuned to the common roadblocks businesses encountered in deploying procurement software.
“The core problem is the poor experience for employees and suppliers,” he said. “The procurement function has an extremely poor overall reputation … within organizations. Simply put, business users think of procurement as a ‘slow-moving, takes-too-long’ roadblock and hindrance to getting work done.”
Along that same theme, a poll from Statista highlights the top procurement management issues companies report experiencing on a regular basis, including dealing with complex purchasing systems and approval processes, time spent reconciling invoices, maintaining compliance with department spending policies and dealing with rogue spending.
Yet procurement as a function is gaining currency within the enterprise, on the plus side. In a 2022 EY survey of chief procurement officers, nearly 70% said that procurement’s role is increasingly important for the delivery of their business’ outcomes, with a shift toward supplier and third-party risk management as their teams’ major priorities.
Oro’s solution is a set of no-code tools that can be used to implement workflows for things like invoicing, supplier onboarding and risk management. The platform offers templates for standardizing decision-making steps around procurement, as well as dashboards that consolidate data from different procurement-related systems and apps in one place.
“At a high level, ‘agility’ is the main benefit of Oro,” Bhojwani told me. “The platform’s no-code engine, designed for procurement, along with features such as versioning, makes it easy to share the management responsibilities across … process owners and contributors and IT. The other big benefit of the Oro platform is its easy integration with existing tools. IT can easily extend Oro workflows by leveraging existing integration recipes or building new recipes.”
Oro — which has a staff of 90 full-time employees across the U.S., India and Europe, with plans to expand headcount to 100 by the end of the year — claims to have grown its customer base by more than 400% over the past year. Annual recurring revenue now stands at between $1 million and $10 million, according to Bhojwani.
Asked about macroeconomic headwinds in the startup ecosystem and whether they might impact Oro’s near-term roadmap, Bhojwani said that he believes the procurement software segment is somewhat insulated, given the function’s perceived value. To his point, as per the aforementioned EY survey, two-thirds of procurement organizations are increasing their investments in procurement digitization to improve their company’s supply chain resilience.
“Companies are more focused than ever on maximizing the return on investments they’ve made in digital transformation,” Bhojwani said. “The emphasis today is on efficiency, automation, collaboration and user experience. It’s less about taking on net new initiatives and instead about wringing every possible advantage and efficiency out of current systems. We believe solution providers that address these concerns will continue to be well-positioned to thrive.”