Vertice has made a name for itself over the years in the crowded world of expense management by focusing on applying AI to optimize an area where businesses are sinking hundreds of billions of dollars a year: software and cloud spending.
The London-based startup’s business has grown 13-fold in the three years since its inception (similar to the rate of growth in software spending) and has now raised $50 million in new funding to expand its vision.
“(Vertice) is designed to standardize companies’ processes around how they buy anything, not just software and cloud,” its CEO and co-founder Roy Tuvey (pictured above, left) told TechCrunch. “Many companies today have different solutions, different silos they look at, and procurement teams are generally under a lot of pressure to deliver savings and efficiencies. They don’t have amazing technology today. So we’ve brought it all together in a unified and simplified platform.”
Lakestar, a new investor in the company, is leading this Series C round. Perpetual Growth and CF Private Equity, as well as previous backers Bessemer Venture Partners and 83North (which co-led Vertice’s Series B almost exactly a year ago ) are also participating.
The startup has now raised about $100 million in total, and while it’s not disclosing the valuation, Tuvey confirmed that this Series C was a raise, valuing the company higher than the “several hundred million” that had been set 12 months ago.
The size of Vertice’s clients has also grown: its clientele now numbers in the hundreds across Europe, the US and Asia Pacific, including chip giant ASML, Euronext, Grant Thornton and banking giant Santander.
For more context, Vertice’s founders have a strong entrepreneurial history: Roy and his brother Eldar previously founded two security startups, ScanSafe, which they sold to Cisco in 2009 for $200 million; and Wandera, which was acquired by Jamf for $400 million in 2021.
Gartner predicts that spending on data centers in 2025 (thanks to cloud and AI), software, related IT services and communications will grow by more than 9% to just under $5 trillion, so it’s not surprising to see Vertice working in a crowded environment. enterprise market share.
Its competitors include a host of platforms that offer different levels of services such as product recommendations, pricing, side-by-side feature comparisons, and more. These include Spendbase, Spendesk, Gartner and G2.
Vertice’s point of differentiation, Tuvey said, is how it integrates with a business’s data to better understand what to suggest. Using the same approaches a cybersecurity firm might use to better understand activity on a network, Tuvey said Vertice uses AI and other tools to build a picture of what a company does, how much it typically spends and what he might need or want. to buy another.
In fact, the startup has built, along the lines of a large language model, a “large software procurement model”, where the parameters are not facts and knowledge, but software usage. The company claims to have ingested data on about $3.4 billion of SaaS and cloud spending, as well as benchmark data for more than 16,000 software vendors (none of which have any financial ties to Vertice, Tuvey confirmed).
Consumers basically use Vertice to speed up the buying process and also save money. The startup says that shopping cycles can typically be cut in half, yielding savings of between 20% and 30%.
“We get all the contract information through AI,” Tuvey said, adding that he uses the technology to build co-pilots to help with acquisition, automating work that finance teams may have had to do manually before. “We deliver standard pricing insights and analytics that they need at the point of purchase. AI is really interesting when it comes to procurement orchestration because you can learn where the company has bottlenecks in its processes.”
That, in turn, helps Vertice understand how the broader business works, he added.
“For example, if a company is always spending a long time with certain steps, for example to check prices but also security compliance, we can see how to run them in parallel and save time,” he said. “And you can just imagine — the more apps you have, the AI can learn and make recommendations.”
It’s the Tuveys’ story, how they’re applying it to procurement and the resulting growth that has investors knocking on the door, said Georgia Watson, the Lakestar partner leading the round. At the moment, spending is top of mind for companies looking to reduce operational costs – especially at startups given the tight funding they’re facing right now.
“Some of our portfolio companies are using Vertice,” Watson said, citing pressure to reduce software spending. “That’s been a conversation we’ve had … and the feedback has been overwhelmingly positive,” she noted, adding that Lakestar had tried to invest before and finally pulled it off this time.
