Vertice raises $50M for its AI-powered SaaS spend platform

London startup Vertice has made a name for itself over the years in the very crowded world of expense management with a focus on applying AI to optimize a single area where businesses, collectively, are currently sinking hundreds of billions of dollars in IT budgets that are exceeding $5 trillion annually: software and cloud spend. Now, with Vertices’s business having grown 13x since it was founded less than three years ago (a rate comparable with the growth of software spend itself), the startup has raised $50 million in new funding to expand its vision.

“[Vertice] is designed to standardize companies’ processes around how they buy anything, not just software and cloud,” CEO and co-founder Roy Tuvey said of the platform. “A lot of companies today have very disparate solutions, different silos that they look at, and procurement teams are generally under a lot of pressure to deliver savings and efficiencies. And really they don’t have amazing technology today. So we’ve brought it all together in a unified and simplified platform.”

Lakestar, a new backer, is leading this Series C, with participation also from Perpetual Growth and CF Private Equity, as well as previous backers Bessemer Venture Partners and 83North, which co-led Vertice’s Series B almost exactly a year ago. 

The startup has now raised around $100 million, and while it’s not disclosing valuation, Tuvey confirmed that it was definitely an upround on the “several hundred millions” of 12 months before. The size of Vertice’s customers has grown, too. The list numbers in the hundreds across Europe, the U.S. and Asia Pacific and now includes chip giant ASML, Euronext, Grant Thornton and banking behemoth Santander.

For some more context, Vertice’s founders have a strong history behind them. Roy and his brother Eldar previously founded two security startups: ScanSafe, which they sold to Cisco in 2009 for $200 million; and Wandera, which was acquired by Jamf for $400 million in 2021.

Given how big the market is for software — Gartner predicts that spend in 2025 on data centers (thanks to cloud and AI), software, related IT and communication services will grow more than 9% to just under $5 trillion (devices add another $800 billion-ish to that sum) — it should not come as a surprise that Vertice works in a very crowded part of the enterprise market. 

Its competitors include a wide plethora of platforms that offer differing levels of service around providing suggestions of similar products, pricing, side-by-side feature comparisons, recommendations and more. Names include the likes of Spendbase, Spendesk, Gartner, and G2. 

Vertice’s point of differentiation, Tuvey said, is how it integrates with a business’s data to better understand what to suggest. Tapping into the same approaches you might imagine a cybersecurity company might use to better understand activity in a network, Tuvey said Vertice has built a system that uses AI and other tooling to build a picture of what a company does, how much it spends typically and what it might need to buy or want to buy next.

In effect, the startup has built, along the lines of a Large Language Model, a “large software procurement model”, where the parameters are not facts and insights as laid out in natural language — but software usage. The company claims to have ingested data on some $3.4 billion of SaaS and cloud spend, with benchmarking data on more than 16,000 software vendors (none of which have any financial relationship with Vertice, Tuvey confirmed when asked). Customers use it to speed up the work they need to do in the process of buying, but also to save money. The startup says that purchasing cycle times can typically be cut in half, with savings of between 20% and 30%. 

“We ingest all the contract information through AI,” Tuvey said, adding that it uses the tech to build co pilots to help with purchasing, doing the work that finance teams might have had to sift through manually before. “We surface benchmark pricing insights and analytics that they need at the point of purchase. AI is really interesting when it comes to procurement orchestration, because you can learn where the company has bottlenecks in their processes.” 

That, in turn, leads Vertice to understanding how the bigger business is working, he added. 

“For example, if a company is always spending long time with certain steps, for example to check pricing but also security compliance, and we can see how to run them in parallel and save time,” he said. “And you can just imagine the more and more app ads you have, the AI can learn and make recommendations.”

It’s the Tuveys’ background, how they are applying it to procurement, and the resulting growth that has had investors knocking on the door, said Georgia Watson, the Lakestar partner who is leading this round. At the moment, spend is top of mind for companies looking to bring down operational costs — something that is especially acute at startups in particular, given the constrictions they are facing around funding at the moment. 

“Some of our portfolio companies are using Vertice,” she said, citing, “the pressure on software spend and really needing to bring that down. That’s been a conversation we’ve been having… and feedback was overwhelmingly positive.” She said Lakestar had been trying to invest previously, and finally pulled it off this time around.