Our story of investing in Pactum

We are excited to announce our participation in Pactum's series B investment round. Pactum is a company using AI to transform how large enterprises handle supplier negotiations. The current round was led by Karma Ventures and included new investors like PortfoLion and Superangel and existing investors like 3VC, Atomico, Project A, Maersk Growth, and Taavet+Sten. It is a privilege to join great investors and support a stellar company like Pactum.

We always seek innovative companies leveraging cutting-edge technology to solve real-world problems. This investment in Pactum exemplifies this philosophy, and we're excited to share why we believe in the company, the team, and the story.

Opportunity to create value on a large scale

We believe that SMEs are the backbone of a healthy economy, but large enterprises still represent a huge part of the value chain - the muscles around the backbone. The spending of S&P500 companies altogether represents more than 40% of the US GDP. There is an enormous value creation opportunity by making that spending more efficient. Those gigantic enterprises manage thousands of suppliers, contractors, and partners in parallel and constantly lose effectiveness while the number of their partner accounts grows rapidly. Like in most fields of business, the Pareto principle takes effect in handling contracts: focus and effort move towards the largest 20% of the partners, who may be involved in 80% of the spending. On the other hand, the rest of the suppliers still account for a large amount of money in the case of billion-dollar companies. These “under-managed” contracts are poised to have opportunities to be improved, ideally for both sides. But who could do that on scale? Negotiating thousands of contracts in parallel? Pactum AI can. And this is not even the only use case for them.

As they write about themselves: “Fortune 500 companies use Pactum AI to simultaneously conduct thousands of autonomous negotiations with their suppliers - finding better deals for both sides. It unlocks millions in savings, enhances supplier engagement, and increases business velocity. This means that procurement teams can manage negotiations with suppliers more effectively, focus on higher-level strategies, and contribute even more value to their businesses. Every autonomous negotiation helps improve the next one.“ And believe it or not, the feedback from suppliers negotiating with the AI is also overwhelmingly positive since Pactum AI is literally programmed to look for win-win situations.

Meeting enterprise demand in the AI space

Artificial Intelligence is undeniably one of the most transformative technologies of our time. Its potential to revolutionize industries and create unprecedented efficiencies is immense. But amidst the hype, it's crucial to distinguish between companies that are merely riding the AI wave and those that are using it to create tangible value. Pactum is at the forefront of this revolution, applying AI in a way that delivers immediate, tangible value to enterprises, that are actively seeking ways to integrate AI into their operations. Pactum's solution addresses this demand head-on, offering a clear path for organizations to harness AI's power in a critical business function: negotiations.

Compelling value proposition thanks to a problem-first approach

Unlike many AI startups that develop technology and search for applications, Pactum took the opposite approach. They identified a pervasive business challenge – the inefficiencies in large-scale negotiations – and then leveraged AI and machine learning as the most effective tools to address this issue. This problem-centric approach ensures their solution is tightly aligned with market needs and laser-focused on delivering clear, measurable results. Their AI-driven negotiation platform doesn't just promise future potential – it delivers immediate value by optimizing supplier agreements, resulting in significant cost savings and improved relationships.

They’ve already created enormous value for their clients: over 4% average value increase resulting in almost $250m potential gains for an average Fortune500 company. And these results were achieved in a way that 71% of the negotiations were handled fully autonomously, without any human touch on the enterprise side - except signing the imrpoved contract.

Impressive growth traction and client roster

Pactum's rapid growth is a testament to the effectiveness of its solution. The company has quickly expanded its client base and demonstrated the scalability of its platform across various industries. The caliber of Pactum's clients speaks volumes about the value they provide. Their ability to attract and retain major enterprise customers underscores the robustness and effectiveness of their solution.

World-class leadership

To build a world-class company, you need to have a world-class team and we found such a team here. Pactum's leadership brings together deep expertise in AI, enterprise software, and business strategy. This combination of skills and experience positions them well to navigate the challenges of scaling a high-growth technology company.

Looking ahead

We're thrilled to partner with Pactum on this journey and look forward to supporting their continued growth and innovation. With its compelling value proposition, problem-first approach, and exceptional leadership, Pactum is well-positioned to make a significant impact in the enterprise AI space.