Supplier discovery often isn’t a walk in the park. According to a survey by Thomasnet, nearly 50% of buyers have worked with a supplier that unexpectedly went out of business. That’s why in 2015, four German entrepreneurs — Christian Heinrich, Fabian Heinrich, Gregor Stühler, and Lee Galbraith — founded Scoutbee, which develops and sells access to an AI-driven supplier discovery platform. After raising $12 million in June 2019 to lay the runway for future growth, the company this week closed a $60 million series B round led by Atomico with participation from Lakestar and Siemens-backed venture firm Next47.
CEO Stühler said the fresh capital, which brings Scoutbee’s total raised to $76 million, will bolster R&D efforts as the company explores strategic acquisitions. Additionally, it will enable Scoutbee to expand its engineering, AI and machine learning, sales and marketing, and product development departments from 160 total staff members to around 260 across offices in Berlin and Washington, D.C. by 2021.
Scoutbee’s suite, underpinned by a proprietary AI engine called Artemis, can benchmark existing suppliers from their sourcing behavior and find new products and suppliers thanks to a streamlined catalog. Scoutbee analyzes up to a terabyte of supply-chain data every 10 weeks, sussing out the relationships among more than 14 million companies, their customers, and over 3,400 OEMs globally.
Scoutbee’s two core products are DeepSee and Streamline. DeepSee draws on customer-specific and third-party sources to surface suppliers’ pricing, competitive relationships, and delivery track records. Streamline expedites discovery by enabling customers to filter by specifications and product demands; it certifies quality by performing financial tests and tracking key performance metrics.
Here’s how the process typically works: Users conduct a supplier search and browse Scoutbee’s validated matches, at which point they choose partners and negotiate deals through sourcing agents. Scoutbee says its marketplace hosts more than 9.5 million suppliers and 4 billion data sets on trade flows, which it claims allows it to cut sourcing time from 24 weeks to roughly 2 months.
One customer — Audi — discovered 329 potential suppliers compared with the 38 it found through traditional channels, and it completed the scout-to-source process in just seven weeks while saving 68%. Other clients of note include Caterpillar, Airbus, Audi, Deutsche Bahn, Adelfiolzener, DMG MORI, Knauf, Bosch Group’s Rexroth, and over 75 others.
Over the next 18 months, Scoutbee aims to facilitate over $100 billion in trading volume across segments including automotive, aerospace, off-highway and industrial machining, construction, manufacturing and retail. By 2021, it hopes to save customers $10 billion a year combined.
“Using databases and online searches in a vacuum, procurement professionals commonly don’t know what proportion of suppliers they have visibility over, nor the suppliers’ level of quality or experience,” said Atomica partner Hiro Tamura, who plans to join the company’s board of directors. “[With Scoutbee,] organizations can gain access to a far greater proportion of suppliers and then streamline them into a strategic RFP process, all within the platform.”
Scoutbee occupies a global procurement software market that’s anticipated to reach $7.3 billion by 2022. Among its rivals are Scout RFP, a San Francisco-based e-sourcing platform provider that has raised $60.3 million to date, as well as Procurify, a cloud-based procurement software company headquartered in Vancouver, Canada that nabbed $20 million in June 2019. A newer entrant is Boston-based Fairmarkit, which snagged $11 million in venture capital for its enterprise spend optimization tools.