Pactum, an artificial intelligence (AI) based platform that enables global companies to automate personalised commercial negotiations at scale, will use the investment to expand both its team and its customer base of Fortune 500 companies.
Today’s investment round that brings the company’s total investment to €12,4M ($15M) was led by Atomico, with participation from Metaplanet (Jaan Tallinn), Checkout.com CTO Ott Kaukver, Wise co-founder Taavet Hinrikus, and Teleport co-founder Sten Tamkivi. Existing investor Project A also followed on as part of this latest round, and Atomico’s Partner Ben Blume will join Pactum’s board.
According to KPMG, 17%–40% of the value of vendor deals is lost due to inefficiencies in the contract negotiation process. For companies balancing hundreds of contracts at any given time, this negotiation process can be time consuming and laborious. Pactum’s platform generates win-win deals for both the enterprise and vendor by responding to the priorities of both parties and integrating relevant data and objectives ahead of time, allowing the platform to proactively renegotiate contracts in as little as 15 minutes, spotting changes in variables such as input prices or delivery terms. Pactum is able to unlock cash flow and untapped value. In a single departmental use of a Fortune 500 company, Pactum was able to unlock working capital at a rate of $1.5M per month.
“While other AI companies focus on reducing labor costs, Pactum focuses on adding value to the bottom line. All businesses make purchases, which means that any firm will be able to benefit from our automated Negotiation-as-a-Service (NaaS) offering,” Martin Rand, CEO and co-founder at Pactum, said.
Founded in 2019, Pactum has already built successful partnerships with Fortune 500 customers such as Walmart, major CPG firms, and industrial distributors.
“Fortune 500 procurement leaders have told us that negotiated agreements are the backbone of their economic engagement, but that their practices for managing supplier contracts are currently filled with inefficiency, uncertainty, and untapped value,” said Ben Blume, Partner at Atomico. “Martin, Kaspar and Kristjan recognised this and, with Pactum, have pioneered a unique approach that makes the negotiating process more supplier-friendly and improves outcomes for both parties. Combining deep expertise in negotiation with world class AI talent, we believe Pactum is exceptionally well positioned to develop a new kind of automation solution, with the ability to create significant amounts of value for both buyers and suppliers of all kinds,” Blume believes.
The company aims to rapidly expand its team to partner with a number of major organisations, further hone its automated technologies and expand the application of its platform into a range of new industries. As reaching supplier agreements with a computer system becomes more normalised, Pactum’s technology can be easily deployed in other use cases such as employment contracts, licensing, or rental agreements.
Pactum: a soon-to-be unicorn
Estonia, known as the champion in founding billion-dollar startups, has already 7 unicorns founded by Estonians and / or in Estonia. The Estonian Investment Agency has recently gathered several predictions about companies in Estonia having the potential to become Estonia’s next unicorns. And according to the most prominent people in Estonia’s startup scene, Pactum is one of the Estonian startups with unicorn potential.
Last summer, Kaspar Korjus, e-Residency’s ex-CEO and co-founder of Pactum, brought out four reasons, why other businesses should consider Estonia as an expansion base to start conquering the universe: „First. You are faster, because the initial seed round investments come very easily and efficiently in Estonia. Second. You have longer runway, because the great tech-talent in Estonia costs less. Third. You are smarter and more efficient, because we have a startup founders’ community on Slack, who answers all of your questions within minutes. And fourth. Because of the Estonian nature, you have less stress, because you can get this work-life balance very nicely.”
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