The increasing challenge that companies face in procurement, which involves acquiring goods and services strategically for organizational tasks, is becoming more pronounced. According to a recent survey conducted by the procurement network Procurious and spend management solutions provider Ivalua, 32% of procurement teams admit to taking shortcuts under executive pressure to respond more swiftly and effectively to challenges.
To help companies address these obstacles, three entrepreneurs—Sudhir Bhojwani, Lalitha Rajagopalan, and Yuan Tung—founded Oro Labs. Oro Labs has developed a platform designed to streamline procurement and supplier management processes across various systems and data sources.
The procurement management software market is highly competitive, with estimates suggesting it will be worth $13.80 billion by 2029, up from $6.15 billion in 2021. Oro faces competition from companies like Levelpath, Pivot, Pando, and Zip, and established players are also entering the space, such as Ramp, which is launching procurement tools for enterprise-level customers.
Despite the competitive landscape, Oro has successfully attracted investors. They recently announced a $34 million Series B funding round led by Felicis, with participation from Norwest Venture Partners, B Capital, and XYZ Venture Capital. This brings Oro’s total funding to $60 million, and the funds will be used to expand Oro’s operations and customer base and develop new use cases for the Oro platform.
Oro’s CEO, Sudhir Bhojwani, explained that Oro initially chose to build its offering as a workflow platform rather than a standalone product. This flexibility allows companies to adapt the platform to various business challenges, including procurement, supplier fraud prevention, and invoicing, among others. Oro is already working with several Fortune 200 customers to address these supplier-related challenges.
Bhojwani, Rajagopalan, and Tung founded Oro in 2020 after gaining experience at SAP Ariba, where they recognized the common challenges faced by businesses in deploying procurement software. The primary issue was the poor experience for both employees and suppliers, leading to a negative perception of the procurement function within organizations.
Procurement challenges identified by companies include complex purchasing systems and approval processes, time-consuming invoice reconciliation, compliance with department spending policies, and handling rogue spending. Despite these challenges, the role of procurement in the enterprise is gaining importance, with a focus on supplier and third-party risk management.
Oro’s solution consists of no-code tools for implementing workflows related to invoicing, supplier onboarding, and risk management. The platform offers templates to standardize decision-making steps in procurement and consolidates data from different procurement-related systems and apps into a single dashboard.
Oro’s main benefits include agility, thanks to its no-code engine and easy integration with existing tools. The company claims to have achieved significant growth, with its customer base expanding by more than 400% over the past year, and annual recurring revenue ranging from $1 million to $10 million.
Sudhir Bhojwani believes that the procurement software segment is somewhat insulated from macroeconomic headwinds in the startup ecosystem due to its perceived value. Companies are increasingly focused on maximizing the return on their investments in digital transformation, emphasizing efficiency, automation, collaboration, and user experience. Solution providers that address these concerns are likely to thrive in the current landscape.
