Tacto Secures $50 Million to Build Future-Proof Supply Chains for the Mid-Market

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• Tacto is an artificial intelligence (AI)-based operating system for building future-proof supply chains in the mid-market

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• Leading investors, Sequoia Capital and Index Ventures, invest $50 million to address the complexity of industrial supply chains with technology

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• The funding is a validation of Tacto's customer-centric approach that creates real time and cost advantages in procurement – this is also reflected in customer loyalty, as not a single customer has ended the collaboration

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Munich, December 12, 2023 – Tacto, the AI-based operating system for future-proof supply chains in the mid-market, has raised $50 million from leading investors, Sequoia Capital and Index Ventures. Existing shareholders Visionaries Club, Cherry Ventures, and UVC Partners also participated in the funding round.

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André Petry (CEO & Co-Founder, Tacto): "Increasing regulation and supply chain disruptions are posing major challenges to our economic backbone, the industrial mid-market: the cost base is rising, material supply is at risk, and the business outlook is uncertain. Tacto is developing a software solution for future-proof supply chains for and together with mid-sized companies as an answer to the challenges of today and tomorrow. The funding round is a vote of confidence in our product, our team, and our customers. The additional capital enables us to continue investing in our technology to help our customers remain competitive amid the ever-increasing complexity of supply chains."

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Procurement holds the key to solving supply chain problems; however, affected companies often lack the right tools. About 50% of the costs of an average industrial company are generated through the procurement of production materials. The complexity of managing hundreds of production-critical suppliers and tens of thousands of materials is enormous. Due to the lack of suitable tools, a large proportion of mid-market procurement organizations still rely on manual processes and decentralized, error-prone Excel spreadsheets. The increasing challenges in supply chains in recent years – wars, climate change, regulation, and inflation – have made it clear: European industry must make its supply chains future-proof to remain competitive.

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Tacto is the answer for the industrial mid-market as an operating system for future-proof supply chains. The AI-based software enables strategic supplier management, streamlined compliance processing for ESG regulations, and efficient as well as sustainable material procurement at optimized terms. This allows manual supplier processes to be intelligently automated. For example, customers are empowered to implement the Supply Chain Due Diligence Act (LkSG) in a legally compliant manner without additional staffing requirements. At the same time, Tacto's AI can identify cost savings of up to 10% of procurement volume by continuously analyzing all data along the supply chain (e.g., cost drivers such as raw material and energy prices).

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Matthias Schlotter (Head of Procurement, Schwäbische Werkzeugmaschinen): "Tacto is our partner for the digitalization of procurement, from automating supplier management to negotiation support for cost savings. Without Tacto, we would have to hire several additional people in times of skills shortages to address disruptions and meet increasing regulatory requirements. With Tacto, we can focus on value-adding topics. For example, we can analyze all supplier data and cost drivers in real time to prepare for a supplier visit at the push of a button at any time, resulting in significant time and cost savings."

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Tacto's customer portfolio consists of industrial mid-sized companies from all industries that manufacture a diverse range of physical products from board games to cleaning agents to tunnel boring machines. These manage several billion dollars in procurement volume and hundreds of thousands of suppliers through Tacto. The customer-centric approach based on measurable time and cost advantages in procurement is also reflected in customer loyalty, as not a single customer has ended the collaboration with Tacto. This convinced leading global investors, Sequoia Capital and Index Ventures, that Tacto is the solution for future-proof supply chains in the mid-market. Both investors share the strategy of investing early in leading companies and building them up over the long term.

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Luciana Lixandru (Partner, Sequoia Capital): "Given the unprecedented pressure on global supply chains, industrial companies are aware that their suppliers are just as strategically important as their customers. After closely analyzing the procurement challenges of mid-sized industrial companies in recent years, we could see that future-proof supply chains are one of the most pressing problems of our time and Tacto is developing a genuine technological answer to it. When we met André and the team, we knew that Tacto would be the company to revolutionize procurement for these companies. Germany, with its strong mid-market, is the ideal place to start."

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Carlos Gonzalez-Cadenas (Partner, Index Ventures): "Supply chains have been severely strained by various macroeconomic and regulatory challenges and the increasing complexity of globally interconnected production. Many companies are struggling to manage everything simultaneously, especially given the continuing skills shortage. Tacto's product helps companies use AI to optimize the multitude of supplier relationships and materials while reducing both complexity and costs. We look forward to working with André, Johannes, Nico, and their team to meet growing demand."

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The newly raised capital will be used to accelerate product development and significantly invest in AI. The goal is to help customers automate all manual supplier and compliance processes, proactively achieve savings by optimizing procurement costs, and reduce emissions through sustainable procurement. Tacto intends to further expand its strong customer base in the industrial mid-market to create future-proof supply chains together with its customers.

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About Tacto

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Tacto develops an intuitive, data-driven, and automated solution for building future-proof supply chains in the industrial mid-market. The AI-based software provides customers with a transparent overview of their procurement activities, algorithmically highlights risks and savings potential along the supply chain, and automates transactional processes in procurement and supplier management to focus on what matters most. The company was founded in 2020 by André Petry, Nico Bentenrieder, and Johannes Groll. The product was co-developed in a co-innovation process with mid-sized industrial companies. Today, more than 40 people with expertise in AI software development and procurement experience work at Tacto.

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About Sequoia Capital

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Sequoia supports today's most ambitious founders in building unique companies from idea to IPO and beyond. Our goal is to be the first partner of the most promising and long-term successful companies of tomorrow. We partner with a few extraordinary companies each year and do everything we can to provide them with the support needed at every stage of their development. Our expertise comes from 50 years of working with outstanding founders like Steve Jobs and Larry Page. In total, Sequoia-backed companies account for more than 25% of the total value of the NASDAQ. Since our founding, we have made the majority of our investments on behalf of charitable organizations and schools such as the Ford Foundation, the Wellcome Trust, and Oxford University. This means that most returns benefit these significant causes.

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About Index Ventures

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Index Ventures works with outstanding founders from seed to IPO to build global companies from disruptive ideas that have a long-term positive impact on the world around us. Index supports companies with an experienced team of investors, strategists, and a comprehensive global network built on three decades of venture capital experience. As a global fund firmly anchored on both sides of the Atlantic, Index works from San Francisco to New York and from London to Tel Aviv as one integrated team. With a global mindset and international team, Index believes that founders and startups can come from anywhere and succeed. When founders succeed, they make a significant contribution to Index's investors, which primarily consist of charitable foundations in the areas of education, health, and research, as well as other impact-oriented organizations.

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About the Founders and the Founding Story

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The three founders, André Petry (CEO), Johannes Groll (CPO), and Nico Bentenrieder (CTO), met during their studies at the Center for Digital Technology and Management (CDTM) and the Technical University of Munich (TUM) and studied together at UC Berkeley. All founders shared the conviction that the collaboration between tech startups and the mid-market represents an enormous opportunity for Europe as an industrial power. When industrial companies faced an existential threat from the collapse of supply chains due to the COVID-19 pandemic, Tacto was founded to provide a technological solution aimed at making supply chains future-proof and keeping production running. André Petry, CEO, has experience in supporting industrial organizations in their transformation, particularly procurement, with AI at BCG and appliedAI. Johannes Groll, CPO, has a background in AI research at TUM as well as experience in optimizing business-critical processes in industry at Palantir. Nico Bentenrieder, CTO, has a background in R&D and procurement at BMW.

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About Visionaries Club

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Visionaries Club is a leading European venture capital firm specializing in early-stage investments, with offices in London and Berlin. The Visionaries LP base unites the strongest network of leading unicorn founders and family entrepreneurs, such as the founders of UiPath, Miro, Wolt, Flixbus, Supercell, Zalando, Mollie, Spotify, Personio, Adyen, HelloFresh, as well as dynasties like Swarovski, Miele, Mittal, Haniel, Stihl, Siemens, and sports personalities active in VC such as Mario Götze (World Cup winner) or Nico Rosberg (Formula 1 World Champion). With its entrepreneurial LP base and B2B investment focus, Visionaries bridges the information asymmetry between "what is possible in the tech startup space" and "what is actually needed in the industrial space."

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About Cherry Ventures

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Cherry Ventures is a leading European early-stage venture capital firm, founded by entrepreneurs with years of experience in scaling startups like Zalando and Spotify. The Cherry team invests in Europe's boldest founders, typically as the first institutional investor, and supports them with dedicated internal functions on topics ranging from go-to-market strategy to company scaling. Cherry Ventures has already invested in over 100 seed-stage startups across Europe, including now world-famous companies such as FlixBus, Auto1 Group, Flaschenpost, Moss, The Exploration Company, Forto, SellerX, and Juni. With locations in Berlin, London, and Stockholm, Cherry Ventures' investment focus spans various industries and regions across Europe.

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About UVC Partners

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UVC Partners is a leading early-stage venture capital firm based in Munich and Berlin that invests in European B2B tech startups from pre-seed to Series A stage. With assets under management of approximately $400 million, UVC Partners typically invests between $500,000 and $10 million as an initial ticket and up to $30 million per company. The portfolio includes leading companies in Deep Tech, Climate Tech, hardware and software, and mobility. As an independent partner of UnternehmerTUM, Europe's largest innovation and startup center, UVC Partners has access to proprietary deal flow, an industrial network of more than 1,000 companies, and access to talent from Europe's leading technical university. Their investments include Flix, Vimcar, planqc, Tanso, Isar Aerospace, TWAICE, DeepDrive, STABL, and many more. They all benefit from the team's extensive investment and exit experience, its ability to build sustainable industry leaders, and its passion for developing the "game changers" of tomorrow.

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Tacto's funding round in the media:
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Handelsblatt: Simpler than Excel: Tacto wants to use AI to secure mid-market supply chains‍

Business Insider: Munich startup Tacto raises 50 million from Sequoia and Index

Börsen-Zeitung: Munich startup Tacto convinces prominent investors

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Tacto, the AI-based operating system for future-proof supply chains in the mid-market, has raised $50 million from leading investors, Sequoia Capital and Index Ventures. Existing shareholders Visionaries Club, Cherry Ventures, and UVC Partners also participated in the funding round.