Candexa startup that aims to simplify procurement—especially vendor management and payment processes—for businesses, announced today that it has raised $45 million in a Series B investment led by Goldman Sachs with participation from WiL (World Innovation Lab). , Altos, NFX, Craft , JP Morgan, American Express and Edenred.
The tranche brings Candex’s total to $85 million and will go toward expanding the company’s presence in Asian markets and an upcoming product tailored to customers with “high-volume, low-payment” needs, CEO Jeremy Lappin told TechCrunch via email.
“Candex saw growth as a result of the pandemic as companies moved to automate and digitize more areas of their business — including shopping,” Lappin said. “Candex has also been insulated from the technology slowdown for some of the same reasons, plus the stability of a customer base in Global 2000 and a revenue model that grows over time to our customers. We believe we will continue to win new logos and grow our business strongly regardless of the financial problems facing the wider economy.”
It’s big talk, sure — but maybe there’s something to it. Candex has doubled in size every year for the past four years and is on track to more than double revenue again this year, according to Lappin. And Candex’s current runway is “easily over a decade,” he added. This writer can’t argue that it sounds like a healthy place.
“The whole investment … was in a very significant upgrade from the A Series,” Lapin said. “We chose to partner with Goldman Sachs because we believe their involvement sends a strong message about our financial stability and our focus on the highest levels of compliance across all of our operations. Goldman has been a key Candex client for several years — a front-row seat for their investors that helped convince them of the value we provide. We added WiL to our investment group because of their ability to help us succeed in Japan, which is a very important market for Candex.”
So how did Candex get here?
It all started in 2011 when Lappin and Shani Vaza-Wahrmann, who met through a mutual friend, built software to help companies in the process of buying from recruitment vendors. Lapin previously founded BountyJobs, a marketplace to connect businesses with headhunters, while Vaza-Wahrmann managed R&D on the SuperDerivatives real-time market data platform.
In 2017, Lappin and Vaza expanded the scope of the software to cover purchases from any vendor and spend category. Today, Candex covers most “tail spend” or unmanaged spend on products and services.
Lappin claims that Candex’s platform — which is designed to work with third-party procurement and enterprise resource management software — allows businesses to pay suppliers in “minutes” rather than weeks, reducing the administrative and operational challenges involved supplier engagement and payment, simplifying data management and generating spend insights. One of the ways Candex speeds up workflows is by using artificial intelligence models to verify invoices are correct, Lappin says, and ensure transactions are taxed appropriately in countries where a business operates.
“Card or credit card purchases allow companies to make purchases in an automated way, but they bypass the basic procurement-to-payment process that large organizations require for their purchases,” Lappin said. “Another way for companies to solve [the procurement] The problem is business process outsourcing. But these models tend to rely on offshore operations in low-cost countries – which are cumbersome to implement and can create additional compliance and accuracy issues as opposed to the automation that Candex relies on.”
New York-based Candex’s client base of around 100 brands includes Sanofi, HSBC, Dell, L’Oreal and Colgate — certainly an impressive collection. To serve this base, Candex plans to grow its 120-person team by more than 50% next year.
“Modern business has a supply base that is extremely global, requiring compliance with a myriad of local laws and regulations, including sanctions, anti-money laundering rules and of course taxes. This makes managing queue costs extremely difficult to do well and can often result in both buyers and suppliers wasting time and money,” said Lappin. “Profitability is not the focus [for us] However, with such a high growth trajectory — but a round of this size in this environment shows how effectively we are performing against all the usual metrics. Our goal here is to build a very global and sustainable business.”
