Pactum AI Inc., a startup that helps companies secure more favorable contractual terms from their suppliers, has closed a $54 million funding round led by Insight Partners.

The Series C investment was announced today. It comes about a year after Pactum’s previous raise, a $20 million round backed by shipping giant Maersk AS. The company has raised more than $100 million in total funding since its 2019 launch.

Large enterprises often source merchandise from upwards of thousands of suppliers. Procurement teams, which are responsible for securing discounts from those suppliers, usually don’t have capacity to manually negotiate every single contract. They consequently focus on the largest deals and use standardized contract terms for the rest.

Standardized terms can lead to unnecessary costs. A supermarket chain’s shopping cart supplier, for example, might provide discounts when order sizes increase. Such discounts can’t be unlocked when the terms of a procurement contract are fixed.

Mountain View, California-based Pactum promises to address the challenge. It provides an artificial intelligence platform that can automatically negotiate more favorite contractual terms with suppliers. It does so using AI agents that interact with supplier representatives via a chatbot interface.

To use Pactum, a company must specify what it plans to offer in exchange for discounts. An electronics retailer might be willing to order up to 10,000 more desktop computers if a supplier cuts its prices by 10%. Pactum’s AI agents use that data to customize their output.

The platform also requires certain other information to work, notably the terms of a company’s existing supplier contracts. Procurement teams can enter that data by uploading a spreadsheet. This removes the need to extensively integrate Pactum with the systems in which an enterprise keeps its supply chain data, which simplifies the setup process.

The platform can secure better prices on not only long-term supply contracts but also smaller, onetime purchases. Pactum says its AI agents take an average of four minutes to improve the terms of such deals. The platform promises to unlock discounts of up to 5% in some cases.

Lowering procurement prices is not Pactum’s only focus. According to the company, its AI agents can improve contractual terms such as the frequency at which a supplier ships merchandise to a store. When an enterprise issues a new contract, the platform can invite multiple suppliers to bid in order to increase the quality of the offers.

“With this investment, we can scale our market reach and grow our portfolio of AI agents with new innovations that benefit organizations looking to transform procurement operations,” said Chief Executive Officer Kaspar Korjus.

The funding round follows a year in which the company more than doubled its annual recurring revenue, off an undisclosed base, thanks partly to new customer additions. Pactum’s installed base now includes Walmart Inc., Honeywell International Inc. and about 50 other large enterprises.

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