Supply chain disruptions caused – or exacerbated – by the pandemic continue to affect businesses in many sectors. For example, 36 percent of small businesses that responded to a US Census Small Business Pulse last year reported delays with domestic suppliers. Any missed shipment or material shortage can be costly. In a 2021 Deloitte survey, more than 40% of CFOs said supply chain shortages or delays caused their company’s spending to increase by 5% or more.
Technology companies in the supply chain have come to the fore during the shortages, promising a solution to a problem unlikely to abate anytime soon. One such supplier is Keelvar, a Cork, Ireland-based supply chain analytics platform that considers different procurement scenarios to guide customers through supply chain decisions.
Keelvar is led by Alan Holland, who left his position as an AI lecturer at the University of College Cork to found the startup in 2012.
“My goal was to use my specialist knowledge in optimization, game theory, and mechanism design to commercialize advances in AI for procurement teams,” Holland told blog line in an email interview. †[O]our solutions have helped our customers adapt to increasingly volatile conditions, especially in the transportation market, where our [platform has] enabled customers to purchase efficiently in an adverse environment.”
Organizations that depend on the supply chain, and practically all of them, perform a process called procurement. Procurement involves acquiring goods and services from suppliers who compete for business by submitting bids that companies evaluate. Suppliers with the most attractive offer receive a negotiable contract.
Keelvar enables customers to collect direct and indirect tender information from suppliers and then analyze multiple award scenarios based on those criteria and other constraints. (Direct procurement is expenditure on goods and services that generate tangible profit, while indirect procurement is expenditure on goods and services necessary for day-to-day business operations.) Algorithms sort, purify, and extract information about supply chain and supplier disruptions before making recommendations. Using the platform, they can also launch and run new bidding events.
During the pandemic, Holland says pharmaceutical companies used Keelvar to spot bad players and inflated prices in the supply chain and respond by diverting goods through other means of transport (e.g., ground rather than air).
“AI-powered sourcing bots are essentially agents designed to perform various tasks and reason about the input they receive, such as identifying suppliers to invite to a bidding event, managing supplier communication and bid analysis, and recommending award decisions,” explains Keelvar on its website. †[The] bots can set up spot bids or mini-tender events in minutes, manage and automate mundane tasks such as inviting carriers, collecting and validating bid data, notifying bid status updates, performing necessary lookups for a rate card and lane information, and generating award recommendations.”
Venture capitalists see the opportunity in the supply chain. Last year was a record year as VCs provided $11.3 billion in financing to industry suppliers, according to Crunchbase. Keelvar is a beneficiary, which today closed a $24 million Series B financing round led by 83North with the participation of Elephant, Mosaic, and Paua.
“Businesses were taken aback when the pandemic shut down the global supply chain. As the issues persist and show no signs of weakening, C-suites are finally recognizing that intelligent automation is a must-have,” said Philip Chopin, partner of 83North, in a statement. “Keelvar’s unique automation and optimization solutions empower procurement teams by helping them easily define their needs and respond faster to market changes. The company’s impressive client list and incredible retention and satisfaction rates are a powerful testament to their technology, team, and vision.”
Keelvar competes with several procurement solutions companies, including Fairmarkit, Tealbook, and Contingent. But while Holland remains vague about Keelvar’s technological advantages and revenue, it points to the company’s overall growth in recent months. Keelvar, which plans to grow its workforce from 85 employees to more than 130 by the end of the year, currently has more than 70 corporate customers and “thousands” of paying users.
†[Recently,] we have significantly expanded and successfully launched our customer base and team [air] and ocean bots for the procurement of automations,” says Holland. “We have” [also] successfully grown as a remote-first organization, doubling our workforce.”
Series B brings the total amount raised from Keelvar to $43 million. Holland says the company plans to use it for product development and expansion in the US.