Join Transform 2021 this July 12-16. Register for the AI event of the year.
Pactum, a platform that leverages AI to automatically negotiate supplier contracts for enterprises, today announced it has raised $11 million in a series A round of funding led by Atomico.
The company’s so-called “negotiation-as-a-service” platform, which hits general availability from today, has already been used by several major enterprises including the world’s largest retailer Walmart, which first signed up for a pilot program last year to automate negotiations with its supplier network.
Pactum’s software essentially scans a contract, extracts what it believes to be the key priorities, and then sets about negotiating terms with the supplier through a chatbot.
At its core, Pactum is all about making contract negotiations less laborious, enabling businesses to go beyond focusing on just a few key terms that normally revolve around price and payments.
“When we work with our customers, we go through a discovery process lasting several weeks,” Pactum cofounder and CTO Kristjan Korjus told VentureBeat. “During that time we have identified up to 30 items to negotiate about in just one use-case alone. Each of these items can be exchanged for value for both sides. Examples include freight, warehousing, contract length, contract cancellation terms, growth rebates, and so on.”
The full deployment process can take a few months, including interviews with key stakeholders involved in the contract process. After Pactum’s system is built for the company in question, it’s able to work completely autonomously. This includes taking decisions based on data, such as current commercial terms, gleaned from sources such as enterprise resource planning (ERP) systems
“The system learns from each negotiation, so every negotiation will make every other negotiation better,” Korjus explained. “This creates a virtuous cycle.”
It’s worth noting that Pactum is perhaps best suited for smaller contracts, or contracts where it’s difficult to justify expending human resources simply renegotiating an existing deal. This may be particularly true for larger enterprises that have dozens or hundreds of smaller contracts with different suppliers — and that is why Pactum is targeting businesses with more than $1 billion in revenue, as they are more likely to benefit from this type of technology.
Additionally, Pactum isn’t purely about helping its own customers — it has to benefit both sides, like any typical negotiation would do.
“This is the quickest way to reach a Pareto optimal outcome — which is a situation where one party (supplier or the enterprise) cannot be better off without making the other party worse off,” Korjus said.
Show me the money
Founded out of Estonia in 2019, Pactum is now headquartered in Mountain View, California, and had previously raised around $4 million in funding. With another $11 million in the bank, the company is now well-financed to scale its technology beyond the handful of enterprises it was already working with to refine its AI smarts.
In other words, Pactum is now officially open for business, and it plans to build a platform that can “simultaneously work with many new enterprise customers on multiple deployments,” according to Korjus.
Aside from Atomico, other investors in this series A round included Project A, Metaplanet, Checkout.com CTO Ott Kaukver, TransferWise cofounder Taavet Hinrikus, and Teleport cofounder Sten Tamkivi.
VentureBeat’s mission is to be a digital town square for technical decision-makers to gain knowledge about transformative technology and transact. Our site delivers essential information on data technologies and strategies to guide you as you lead your organizations. We invite you to become a member of our community, to access:
- up-to-date information on the subjects of interest to you
- our newsletters
- gated thought-leader content and discounted access to our prized events, such as Transform 2021: Learn More
- networking features, and more