CandexA startup that aims to simplify procurement, specifically supplier management and payment processes, for businesses, announced today that it 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 the total raised by Candex 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, small payment” needs, CEO Jeremy said. Lappin to TechCrunch via email.
“Candex experienced growth as a result of the pandemic, as companies began to automate and digitize more areas of their businesses, including purchasing,” Lappin said. “Candex has also stayed safe from the technology slowdown for some of the same reasons, plus the stability of a Global 2000 customer base and a revenue model that grows over time at our customers. “We believe we will continue to earn new logos and grow our business powerfully no matter what economic headwinds the broader economy faces.”
It’s a big talk, no doubt, but maybe there’s something to it. Candex has been doubling in size every year for the past four years and is on track to double its revenue again this year, according to Lappin. And Candex’s current track record is “easily over a decade,” he added. This writer can’t argue that that seems like a healthy place to be.
“The entire investment… was made with a very substantial advance compared to Series A,” Lappin said. “We chose to partner with Goldman Sachs because we believe their participation sends a strong signal about our financial stability and our focus on the highest levels of compliance across all of our operations. Goldman has been a major client of Candex for several years – a front-row seat for its investors that helped build conviction in the value we offer. “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, created software to help companies in the process of purchasing from contracting vendors. Lapin previously founded BountyJobs, a marketplace for connecting companies with headhunters, while Vaza-Wahrmann managed research and development on real-time market data platform SuperDerivatives.
In 2017, Lappin and Vaza expanded the scope of the software to cover purchases from any supplier and spend category. Today, Candex covers most of the “end spend,” or unmanaged expenses on products and services.
Lappin says Candex’s platform, which is designed to work with third-party procurement and enterprise resource management software, allows companies to pay suppliers in “minutes” rather than weeks, reducing the administrative and operational challenges that come with hire and pay suppliers. , streamlining data management and generating information on spending. One of the ways Candex speeds up workflows is by employing artificial intelligence models to verify that invoices are correct, Lappin says, and ensure that transactions are taxed appropriately in the countries where a company operates.
“Purchasing cards or credit cards allow corporations to make purchases in an automated manner, but they avoid the basic payment-to-payment process that large organizations require for their purchases,” Lappin said. “Another way for companies to solve the (procurement) problem is to outsource business processes. But these models tend to rely on offshoring activities to lower-cost countries, which are difficult to implement and can create additional compliance and accuracy issues compared to the automation Candex relies on.”
New York City-based Candex’s customer base of around 100 brands includes Sanofi, HSBC, Dell, L’Oreal and Colgate – an impressive collection, to be sure. To service this base, Candex plans to increase its team of 120 people by more than 50% next year.
“The modern enterprise has a supply base that is extremely global, requiring compliance with countless local laws and regulations, including sanctions, anti-money laundering rules and, of course, taxes. This makes end spend management extremely difficult to do well and can often cause both buyers and suppliers to waste time and money,” Lappin said. “Profitability is not a focus (for us) yet, with such a high growth trajectory, but a round of this size in this environment shows how efficiently we are performing compared to all the usual metrics. Our goal here is to build a very global and long-lasting business.”