Pactum (no relation to the Brazilian satanic black metal band), the Tallinn-based AI platform for commercial negotiations has raised $11 million in a Series A round. This funding arrives just a few week shy of its $3 million raise last June.
Led by industry giant Atomico, the round saw participation from Metaplanet and existing investor Project A, as well as individual investors Ott Kaukver (Checkout.com CTO), Taavet Hinrikus (Wise chairman & co-founder), and Sten Tamkivi (Teleport co-founder). As part of the deal, Atomico partner Ben Blume will join the board at Pactum.
The funding round is expected to be used to scale up the deployment of Pactum’s offering due to significant market demand. In order to accomplish this, Pactum aims to up the headcount with the ultimate goal of establishing its number of partnerships with major organisations.
“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,” comments Atomico Partner Ben Blume. “Pactum, have pioneered a unique approach that makes the negotiating process more supplier-friendly and improves outcomes for both parties.”
Founded in 2019 by Kaspar Korjus (interestingly former managing director of Estonia’s e-Residency programme) , Kristjan Korjus, and Martin Rand, Pactum isn’t just your run-of-the-mill, let’s-throw-some-AI-at-a-problem, ship it startup. Instead, Pactum is generating tangible results. I use the term tangible loosely here, but when it comes down to it, we’re talking dollars and cents.
Dollars and Cents
Pactum reports that in a single department within a Fortune 500 company, their offering unlocked $1.5 million in working capital on a monthly basis. For a Fortune 500, $1.5 million might not be a whole lot, but when you factor that this is within one silo within the entire farm, well, now we’re talking about a whole lotta working capital.
According to KPMG, approximately 17% to 40% of vendor deal value is lost along the way due to the contract negotiation process. When dealing with hundreds of contracts at any given time, it’s easy to see how this process could spiral out of control. And quickly.
Pactum’s solution steps in and generates win-win deals for the vendor and the company by responding to priorities of both sides of the table and integrating relevant data and objectives ahead of time. Translated: Pactum can renegotiate contracts in as little as 15 minutes, eagle eyeing minute changes such as variables as input prices or delivery terms.
“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,” said CEO Martin Rand. “Although this technology has so far been limited to the most innovative enterprises, Pactum will open the door to all businesses to benefit from AI’s value generation potential – starting with Fortune 500 companies but by no means ending there.”