Omnea raises $25M to tackle the painfully annoying procurement market
Procurement ? the process of requesting, vetting and eventually buying IT and other supplies in an organization ? is typically one of the more frustrating, dry, yet inevitable aspects of a workplace.
When you are in need of a new app or device, or when you need to renew an existing contract for one in your normal life, you just get on with it. But at work? You may already know what you need, but getting it is not that easy. There are budgets, management sign-offs, pre-existing IT contracts, security vetting, price negotiations, and other steps that can complicate the process.
A startup out of London called Omnea has built a platform to reduce that pain, and today it?s announcing that it has raised $25 million in funding to expand ? specifically a $20 million Series A and a $5 million seed round that it?s announcing for the first time today.
Omnea?s not disclosing its valuation. (Would you expect any less from a startup geared at helping businesses keep the upper hand in price negotiations?) But as a marker of why investors are backing it, the company says last year revenues increased 8x from a list of customers that includes McAfee, Onfido, Proofpoint, Podimo, Robin AI, Sana, and Typeform.
Omnea was co-founded by Ben Freeman and Ben Allen, two former senior executives at cybersecurity company Tessian, who saw first-hand how turgid procurement looked both from the inside at their own company, but more importantly from the outside as a vendor to other businesses.
?We sold email security to mid-sized and large businesses, to everyone,? Freeman, the CEO, said. ?Our buyers used to dread involving procurement. They used to literally do all the demos, go through all the stages and and then at the end, there?d be this poor procurement guy, or whoever it is, thrown in at the 11th hour.?
This 11th-hour person was there to negotiate prices, but it was obvious that the task was never going to go that well for the buyer because of the lack of information and context. ?They weren?t involved early enough to negotiate,? Freeman said. From that perspective, either the deal would fall through or would just be nodded through, neither of which are great outcomes.
Omnea is tackling a mighty challenge, one that has arguably crept up on the unassuming world of work.
In the past, procurement might have just been another department in a business, stamping or rejecting (but usually stamping) requests to pay for something new ? particularly in smaller companies or at least companies with smaller technology footprints.
These days, that process has undergone a drastic change, thanks to the complexity of the paperless office.
Software is purchased as a service and just about everything ? even a notepad ? comes in the form of software. Or, that notepad comes in the form of hardware which now needs regular refreshes.
All the software and hardware intermingle via The Cloud, and you get a spaghetti effect of many things that work together, but might also conflict and overlap with each other. Cue security and IT issues.
Gartner estimates there will be $5.26 trillion spent on all manner of procurement globally in 2024, up 7.5% a year ago and driven in part by what it describes as an ?AI tax?: new tech means new spend. Omnea cites figures that estimate the average time for a procurement process is six months, involving up to 11 stakeholders in an organization.
Omnea?s answer to all of the above is an all-in-one platform powered by AI to help triage requests and improve how to respond to them, while also removing some of the fragmentation that has grown up around procurement. Software renewals are contextualized with feedback from current users, which is taken into account when evaluating a product and price negotiation; software requests are routed to the right teams to consider against what already exists within the organization; a supplier portal provides an easier way to onboard and work with vendors.
?It?s about managing soup to nuts, all of the services and goods and products I need from the time I decide I want them, all the way to managing their annual renewal and kind of vendor management and third party supplier management,? Sonali De Rycker, a partner at Accel, said in an interview.
Longer term, there remain questions about how procurement fits into the wider suite of back-office tools that a company uses. Right now, the back office is an area that is dominated by large players like SAP, Workday, Salesforce and Microsoft ? all of whom are candidates to be partners, but just as easily competitors, to the likes of Omnea. More positively, that speaks to the opportunity at hand right now.
Accel led the Series A, with participation also First Round Capital and Point Nine, who jointly led the seed. Omnea?s other investors include David Clarke (the ex-CTO of Workday), Claire Hughes Johnson (the ex-COO of Stripe), and Anne Raimondi (COO of Asana).
