While any business’ goal is to fuel growth, it goes without saying that the bigger the company gets, the more complex scaling becomes. This fact is particularly apparent during the procurement process when a company purchases goods and services that make running its business possible. The global market for procurement analytics is projected to reach $8 billion by 2026, and an Atlanta-based company is making major headway within the space.
Focal Point’s digital solution works to help enterprises optimize their procurement operations. Its platform uses APIs to consolidate data that lives across various existing procurement solutions and then augments that data with info on things like supplier diversity and supplier risk data. It also lets users collaborate across departments to streamline tasks.
Focal Point pulled in a $3 million seed funding round at the end of June to help build out its end-to-end solution for procurement management.
In an interview with Built In, Focal Point’s founder and CEO Anders Lillevik discussed the company’s recent growth and its plans for the future. The conversation has been edited for length and clarity.
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What’s the origin story behind Focal Point? How did your past experience lead to its creation?
I spent most of my career in the trenches as the head of procurement and chief procurement officer overseeing billions of dollars in annual spend at Fannie Mae, Webster Bank and other large organizations. This gave me firsthand experience in countless pain points that so many procurement professionals deal with daily. Until now, there hasn’t been a solution for procurement that ties everything together and unifies data that lives in multiple legacy platforms. Many procurement departments are still manually tracking and managing things in spreadsheets and emails.
A real “aha!” moment came when I was working as a consultant helping a client choose procurement software. The quote for the software suite was far north of $1 million and that alone astonished me. Worse yet, the product would still leave the procurement team to manage work in spreadsheets. The need for chief procurement officers to fully modernize and optimize operations by unifying all data and existing technology as well as automate procurement tasks was the genesis for Focal Point.
Based on how the procurement industry looks today, why are Focal Point’s solutions vital to those it serves?
It’s vital for efficiency and ROI. There is, however, a more strategic point. Procurement performance has historically been measured purely by cost savings, which misses the broader contributions that procurement can bring to the bottom line and other organizational goals. With an increased focus on things like supplier diversity and how suppliers contribute to an organization’s overall ESG goals, there are many more things to measure besides immediate money saved.
Since its founding year, how much has Focal Point grown?
Our first couple of years we were heavily focused on developing the product. We launched in 2020 and raised a $679,000 pre-seed investment from Surface VC, Techstars and various angels in 2021. We put that capital to work building the first version of our platform last year. We got off the ground with a handful of large customers in a wide variety of industries, from hospitality to gaming to e-commerce, and we have a healthy pipeline of business leads.
We got some early wins in 2021 with large and well-known brands and will continue that this year. We are on track to more than double revenues from 2021 to 2022 and expect to exceed those growth figures for 2023 as we put the injected capital to good use.
What are some factors to which you attribute that growth?
Procurement as a practice within enterprises has traditionally been slow to innovate. However, increasingly — spurred partially by the pandemic — procurement leaders are understanding the need and value for solutions that help solve their most basic problems and pain points. While spreadsheets and multiple siloed software solutions are technically digital, they are no way to run a modern procurement department.
In short, our initial success is being accelerated by chief procurement officers (CPOs) buying into our value proposition as it’s coming straight from a veteran CPO that’s walked thousands of miles in their shoes.
Following the company’s recent seed funding, how do you plan on expanding Focal Point further?
We plan to continue our momentum by investing across the business in product development, sales, marketing and CX. We have an aggressive plan to target CPOs at large global enterprises in key verticals with a simple message of modernization.
Most of all, we will continue to accelerate product development as developing additional features and functionalities for the procurement space is still a target-rich sport.
We have developed our corporate center in Atlanta and will continue to grow this more as we put capital to use. Having lived in multiple continents, countries and cities in the United States, I am blown away at the quantity and quality of Atlanta resources and consider this home, now and in the future.
Being cost-conscious, we will be looking to augment the Atlanta center with additional cost-centric resources, with an emphasis on developing centers rather than purely remote workers.
