Tacto secures €50m to tackle disruptions and bureaucracy in industrial supply chains
- Tacto is an AI-based operating system for future-proof supply chains in mid-sized industrials, the ‘Mittelstand’
- Leading investors, Sequoia Capital & Index Ventures, back Tacto with €50m to double down on solving ever-increasing complexity in industrial supply chains with AI
- The funding arrives amidst growing market demand with the company retaining all its customers since its inception, demonstrating strong customer value and satisfaction
Munich, December 12th, 2023 – Tacto, the AI-based operating system for future-proof supply chains, has raised €50m from leading investors Sequoia Capital and Index Ventures. Existing investors Visionaries Club, Cherry Ventures, and UVC Partners also joined the financing round. Tacto helps mid-sized industrial organizations manage the rising complexity of supply chains, under strain from external macroeconomic and political shocks as well as regulatory pressures.
André Petry (CEO & Co-Founder, Tacto): “Supply chain disruptions and bureaucracy threaten our European economic backbone, 90 thousand mid-sized industrial companies, the ‘Mittelstand’. Tacto addresses these existential threats by offering a technological solution to build future-proof supply chains – digital, efficient, and sustainable. The funding round confirms our product's strength and allows us to double down on helping our customers stay competitive amid ever-increasing supply chain complexity.”
Procurement is the gateway to fixing supply chains, but procurement teams lack the appropriate tools. The average industrial organization spends 50% of its revenue on procurement. Yet, many procurement organizations rely on manual workflows and opaque spreadsheets despite the complexities of managing hundreds of suppliers and tens of thousands of articles crucial for production. Several disruptions such as war, climate change, regulation, and inflation have made clear: The European industry must future-proof its supply chains to stay competitive.
Tacto is the answer: A central operating system for future-proof supply chains in mid-sized industrials. The AI-based software streamlines all procurement workflows, effortlessly ensures compliant and sustainable supply chains, and enables efficient material sourcing. On the one hand, Tacto automates manual tasks e.g., necessary for regulatory compliance with various Supply Chain Acts. Without Tacto, organizations need to hire approximately two additional people solely to comply with upcoming ESG regulations. On the other hand, Tacto's AI can identify cost-saving potentials of up to 10% of procurement spend by analyzing volatile price developments in key cost drivers (e.g., raw material and energy prices) across the entire article portfolio and comparing them to actual prices paid.
Matthias Schlotter (Chief Procurement Officer, Schwäbische Werkzeugmaschinen): “Tacto enables our whole procurement organization from supplier management automation to cost-saving negotiations. Without Tacto, we would have to hire several additional people in times of skilled worker shortage just to manage our supplier base due to all the regulations and disruptions in the supply chain. With Tacto, we have efficiently streamlined all supplier workflows and have access to real-time analysis of all supplier data, leading to significant cost and time savings.”
Tacto has mid-sized industrial customers from all sectors producing and processing every imaginable good of our physical world - from board games to cleaning agents to tunnel drilling machines. The software manages billions of euros of procured material from hundreds of thousands of suppliers. Tacto’s customers form a community sharing best practices to be stronger together. Since its inception in 2020, Tacto has not lost a single customer convincing global investors, Sequoia Capital and Index Ventures, that Tacto will be the leading operating system for future-proof supply chains in mid-sized industrials. Both investors are united by their strategy of investing in category-leading companies for the long term.
Luciana Lixandru (Partner, Sequoia Capital): "With global supply chains under pressure like never before, business leaders know that their suppliers are as strategically important as their customers. Having watched the procurement challenges being faced by small- and mid-sized industrial companies closely over the past few years, we could see the scale of the opportunity - and that it's Tacto who has a real technological answer. When we met André and the team, we knew Tacto would become the company to revolutionize procurement for these businesses and Germany is the ideal place to start due to its strong ‘Mittelstand’."
And it was precisely this forward-looking business that convinced UVC Partners to invest in Tacto in 2020. Benjamin Erhart, General Partner and one of the first investors, looks back: "It has now been 4 years since we had the chance to work with André in our investment team and discover his ability to excel from detailed analysis to visionary leadership. The absolute dedication to a "customer problem first culture," the patience to relentlessly work on perfect product-market fit, and amazing operational excellence were three striking factors we could proudly observe in the last few years while backing Tacto. It’s great that a startup from our ecosystem is shaping core processes in mainly family-run companies, which we also aim to support through our UnternehmerTUM ecosystem."
Carlos Gonzalez-Cadenas (Partner, Index Ventures): “Supply chains are under unprecedented pressure from external factors and the rising complexity of modern industrial productions. Many companies are under water, trying to manage it all. Tacto’s approach takes a lot of the pain and costs out, applying AI in smart ways to help companies handle the myriad of relationships and materials across the entire supply chain cycle. We’re excited to partner with André, Johannes, Nico, and their team to help them respond to the rising demand.”
The funding will be used to speed up product development and invest significantly in AI to help customers automate all supplier and compliance workflows, create savings through optimizing material costs, and reduce emissions via sustainable procurement. Tacto aims to expand its community by building on its strong customer base, equipping the Industrial Mittelstand with technology to meet today’s supply chain challenges while preparing for tomorrow.
Online press-kit: https://www.tacto.ai/presskit
Tacto develops an intuitive, data-driven, and automated solution for procurement in medium-sized industrial organizations (the “Industrial Mittelstand”). The AI-based software gives customers a transparent overview of their procurement activities, algorithmically highlights risk and savings potential along the supply chain, and automates transactional workflows in sourcing and supplier management to focus on what matters. The company was founded in 2020 by André Petry, Nico Bentenrieder, and Johannes Groll. The product was developed in a co-innovation with mid-sized industrial companies. By now, more than 40 people with expertise in AI software development as well as industrial procurement work at Tacto in Munich. For more information, visit www.tacto.ai
About the founders and the founding story
The three founders, André Petry (CEO), Johannes Groll (CPO), and Nico Bentenrieder (CTO), met each other while studying at the Center for Digital Technology and Management (CDTM) of the Technical University of Munich (TUM) as well as lived together at UC Berkeley. All founders shared the belief that the collaboration of tech startups and the ‘Mittelstand’ presents a tremendous opportunity for Europe as an industrial powerhouse. As industrial companies were confronted with an existential threat due to supply chains breaking down with the Corona pandemic, Tacto was founded to provide a technological solution to future-proof supply chains and keep production running. André Petry is the CEO with a background in supporting industrial organizations to transform their business, in particular procurement, with AI at BCG and appliedAI. Johannes Groll is the CPO with a research background in Machine Learning at TUM as well as experience in business-critical process optimization in the industry at Palantir. Nico Bentenrieder is the CTO with a background in Research & Development having worked closely with Procurement at BMW. More information: André Petry, Johannes Groll, Nico Bentenrieder
About Sequoia Capital
Sequoia helps daring founders build legendary companies from idea to IPO and beyond. We aim to be the first true believers in tomorrow’s most valuable and enduring businesses. We partner with a few outliers each year and go all-in, providing them with the hands-on help required at every stage of the company building journey. Our expertise comes from 50 years of working with legendary founders like Steve Jobs, Larry Page, Jan Koum, Adi Tatarko, Brian Chesky, Jensen Huang, Anne Wojcicki, Eric Yuan, Patrick Collison, Julia Hartz, and Sebastian Siemiatkowski. In aggregate, Sequoia-backed companies account for more than 25% of NASDAQ's total value. Since our inception, the vast majority of the money we invest has been on behalf of nonprofits and schools like the Ford Foundation, Wellcome Trust and Oxford University, which means most of the returns we generate benefit these great causes.
About Index Ventures
Index Ventures partners with exceptional entrepreneurs from Seed to IPO, helping to turn their bold ideas into global businesses, and through the companies they build, have a long-lasting and positive impact on the world around us. Index-backed businesses are supported by an experienced team of investors, strategists, and an extensive global network built over three decades of startup investing. Operating as one team, with feet firmly on both sides of the Atlantic – from San Francisco to New York, and London to Tel Aviv – Index is an international team with a global mindset, and experience supporting founders wherever they emerge. When founders succeed, they generate returns that in turn benefit Index’s investors, including non-profit foundations; education, healthcare and research endowments; and other impact-driven organizations.
About Visionaries Club
Visionaries Club is a leading European early-stage VC fund with offices in London and Berlin. Visionaries LP base unites the strongest network of leading unicorn founders and family business entrepreneurs such as the founders behind UiPath, Miro, Wolt, Flixbus, Supercell, Zalando, Mollie, Spotify, Personio, Adyen, HelloFresh to dynasties such as Swarovski, Miele, Mittal, Haniel, Stihl, Siemens, as well as sports personalities active in VC such as Mario Goetze (Soccer World Champion) or Nico Rosberg (Formula 1 World Champion). With its entrepreneurial LP base and b2b investment focus, Visionaries is bridging the information asymmetry of “what´s possible” in the technology startup space and “what is actually needed” in the industrial space.
About Cherry Ventures
Cherry Ventures is a leading European early-stage venture capital firm led by a team of entrepreneurs with experience building fast-scaling companies such as Zalando and Spotify. The firm backs Europe's boldest founders, usually as their first institutional investor, and supports them in everything from their go-to-market strategy, scaling of their business, and team formation across all crucial stages in their journey. Cherry Ventures has previously invested in the pre-seed and seed stages of over 100 companies across Europe, including FlixBus, Auto1 Group, Flaschenpost, Moss, The Exploration Company, Forto, SellerX, and Juni. With operations and investors in Berlin, London, and Stockholm, Cherry Ventures invests across Europe and across industries.
About UVC Partners
UVC Partners is a leading Munich- and Berlin-based early-stage venture capital firm that invests in European B2B tech start-ups from pre-seed to series A. With about €400 million in assets under management, UVC Partners typically invests between €500,000 and €10 million initially and up to €30 million per company. The portfolio includes category leaders in deep tech, climate tech, hard- and software, and mobility with various technologies and business models. As an independent partner of UnternehmerTUM, Europe's most extensive innovation and startup center, UVC Partners has access to proprietary deal flow, an industrial network of more than 1,000 corporates, and access to talent from the leading European technical university. The investments include Flix, Vimcar, planqc, Tanso, Isar Aerospace, TWAICE, DeepDrive, STABL, and many more. They all benefit from the team's extensive investment and exit experience, their ability to build sustainable category leaders with a competitive advantage, and their passion for growing the game changers of tomorrow. To learn more visit www.uvcpartners.com