Pactum, the business negotiation technology pioneer that enables enterprises to unlock value in deals they typically can’t negotiate on their own, has raised €19 million in additional funding.
Negotiations now reimagined
Pactum was founded in 2019 by Estonian entrepreneurs Martin Rand, Kaspar Korjus (e-Residency‘s ex-CEO) and Kristjan Korjus. The company is based in Mountain View, California, with engineering and operations in Estonia. Prior to the latest round, it had already scooped around €15M in investments.
Pactum’s solution uses advanced mathematical models, cognitive science, and best-in-class negotiation techniques. It leverages intelligent bots to digitally engage third parties and negotiate mutually-benefiting contracts, leading to better pricing, payment terms, and supply continuity. On average, Pactum generates savings of 3%-5% when fully deployed by enterprise clients, creating hundreds of millions of dollars in unrealized savings.
This is a significant impact. According to data from the US Census Bureau, the average profit margin for the transportation and warehousing industry was 3.2% in 2019, while the average profit margin for the retail sector was 3.1%
The round, backed by world-class investors, was led by 3VC, with participation from new investors NordicNinja VC and Maersk Growth and existing investors Atomico, Project A, Metaplanet, as well as Taavet Hinkirus and Sten Tamkivi.
“As we enter a period of slowing growth, it is even more crucial that companies engage their partners and negotiate agreements that bring financial and operational benefits to both parties,” says Martin Rand, co-founder and CEO of Pactum. His company already counts Maersk, Walmart and Wesco, among other clients from Fortune 500, helping them save costs. For example, shipping giant Maersk’s procurement team used Pactum to negotiate spot trucking rates.
Battling the economic downturn
Spurred by the rising interest rates, the global economic recession is now considered a significant possibility. For the US, the world’s biggest economy, the recession may arrive in mid-2023 based on historical economic markers and waning consumer financial power, finds RBC Wealth Management. The European Central Bank also sees an increased likelihood of a recession in the 19 countries that use the euro currency.
Estonian economy shows resilience in this challenging environment and is expected to recover in the second half of next year, suggests Bank of Estonia analysis. And now Estonian innovations helps other to emerge stronger from the current environment. Earlier this year, Estonian-founded Eurora, which takes care of worldwide customs regulations for e-commerce players, raised €37M and opened a new R&D facility. And Estonian ERP startup Katana, that ‘just makes manufacturers love their software’, raised €36M.
Pactum is also making a big difference for world-leading corporations. “We have spent 24 months deep diving into digital procurement, with Pactum being our first investment. Working with the Pactum team for that period has confirmed that they are a top-performing team with superior knowledge about procurement and negotiations”, Peter Jorgensen, partner at Maersk Growth, says.
Pactum will leverage new funding to further expand in the US and Europe and accelerate investment in its capabilities across logistics, intelligent contract optimization and retail item-level merchandising operations. “We believe Pactum has all the elements needed to be a clear game changer in the business negotiations process,” Eva Arh, partner at 3VC, notes.
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