It’s no surprise that software has continued to proliferate every function and every vertical, becoming the fastest growing spend category for many companies. Simultaneously, the individual software purchasers are increasingly decentralized. As software shifts from traditional sales to self-serve, employees (who are largely digitally native and equipped with expense cards) can purchase the software they need without going through a cumbersome sales process. What’s the result? Mass confusion. In 2016, Symantec’s Internet Security Threat Report noted that “...the average enterprise organization was using 928 cloud apps. However, most CIOs think their organizations only use around 30 or 40 cloud apps.”
This has only gotten worse.
Organizing, purchasing, and tracking software spend have become an enormous burden on finance and procurement teams. The result is that the buying process requires four systems – and the typical company overpays by 30%.
Tropic has built a software procurement and spend management platform to be used by the entire organization. An engineering manager needs more Github seats? She/he requests the seats in Tropic, the request gets approved by the finance/procurement team, and Tropic takes care of the rest. Tropic purchases for companies (both on net-new and re-ups) and neatly organizes the updated contract alongside all other software contracts. Functionally, this means clients have only one vendor and one contract to manage, Tropic.
Tropic customers save on average 23% on software spend. Tropic’s service will only get better as data compounds, using comparisons and scale to more effectively transact with vendors and provide better deals to customers. Tropic uses customer data and software to streamline and enrich every component of the procurement process, including market intelligence, vendor selection, pipeline management, and spend visibility.
I am ecstatic to announce that Canaan has led Tropic’s $25M Series A with participation from Micah Rosenbloom at Founder Collective, Mo Koyfman at Shine Capital, Jason Finger, and Scott Belsky.
This focus on simplicity, automation, and efficiency matters tremendously in a market that’s long been synonymous with the exact opposite. With point solutions for every procurement process (including PO creation and delivery, billing, spend data analysis, real-time budgeting, vendor management, and AP), enterprises are an eternal hunt for savings, but also simplification. This glut of point solutions (coupled with a lack of sufficient automation) has led to enormous waste and frustrated users. We believe that platforms like Tropic that offer not only cost savings, but also simple and efficient product experience, will be the ones that win.
Just two years old and only a year after launch, Tropic’s capital efficiency and customer traction have been outstanding. The company has 60+ customers (including Qualtrics, Vimeo, Intercom, and Loom) and has surpassed $250 million in managed spend. It’s clear that David’s (CEO) superpower is selling, but not just on the product front. He has also assembled a remarkable team of experts from the likes of Twitter, Tesla, Boeing, Walmart, and Carta.
We’re excited to be a part of the journey and look forward to executing on Tropic’s mission: providing painless software management for tech-driven businesses.