SupplyPike of Fayetteville will use $25 million in Series B capital funds it raised last month to hire 60 people over the next year and invest in research and development, engineering, design and sales, CEO and co-founder TJ Sangam says.
The funding also means Series B investors Noro-Moseley Partners of Atlanta and Frontier Growth of Charlotte, North Carolina, will join the software firm’s board, which includes Series A investors Blumberg Capital of San Francisco.
SupplyPike offers software for retail brands to automate the process of identifying, disputing and getting to the causes of penalties and fines retailers like Walmart, Target, Kroger and Amazon levy on suppliers for not meeting certain obligations. Retailer-specific criteria could include getting product to the retailer on time, in the right quantity, with the correct labeling and more.
The software centralizes supply chain data, incorporates the retailer-specific rules and uses machine learning algorithms to detect invalid fines and hold either the retailer, warehouses or the carrier responsible for lost sales. The overall goal is to help customers save money.
This new funding was raised because the firm’s customers want the firm to expand the scope of the problems it solves for them, Sangam said.
SupplyPike began its spinoff from logistics provider CaseStack in 2018 and completed it in 2019. Back then, its business strategy was to approach companies, ask what they needed, then build customized software. It took SupplyPike 12-18 months to finish a job when that was its model, Sangam said.
When he took over right before the 2020 pandemic hit, SupplyPike had no customers, he said. The problem was that when you build software specifically tailored to one business, you can’t sell it to others, Sangam said.
He led a pivot to a software-as-a-service business strategy, selling the same software to several different businesses. This provided more predictable revenue and allowed for fixed subscription prices, Samgam said.
Those prices vary based on the retailer involved, the supplier’s annual sales and whether the supplier wants to be billed monthly or annually. Since changing its strategy, SupplyPike has experienced “serious growth,” Sangam said.
“The last couple of years, we went from zero to about $100 million in valuation. And we’ve got almost 400 customers now,” he said. “That’s kind of why we went and raised the money, because our customers were asking us for a lot more features. And they wanted us to do more things.” Those customers include King’s Hawaiian, Keurig and Johnson & Johnson.
Though SupplyPike works with suppliers of all sizes and its software is one-size-fits-all, the firm would like to work with more large suppliers, Sangam said.
SupplyPike has about 100 employees. The 60 new jobs will be across the board, from software engineers and developers to customer service people, supply chain experts, salespeople and researchers.
With the new funding, Sangam said, the firm hopes to help customers tackle more “upstream” supply chain issues. That means that SupplyPike wants to use advanced algorithms to help suppliers find the root cause of the supply chain issues that trigger the fines, that cause their products to not be in the right location, in the right quantity and at the right time, he said.
“I feel like the supply chain is having a moment. People are wanting to really focus on making sure that it is stable,” Sangam said. “The big problem that we’re solving is that there’s all these players in the supply chain that don’t talk to each other. … The warehouse doesn’t talk to the supplier. And there’s always these different versions of the truth.
“SupplyPike is really well positioned to be that central, single source of truth, where we’re able to say what actually happened. So there’s gonna be a need for a service like this, because everything is still very unpredictable right now. Things are still very chaotic.”
He cited both the war in Ukraine and the pandemic as the cause of supply chain instability.
Some of SupplyPike’s growth can be attributed to the pandemic, Sangam said. He said people stopped buying services and spent most of their money on the goods that suppliers provide to retailers. Demand drove up prices, and retailers started putting more constraints on suppliers to try to better serve their own customers, Sangam said.
But many suppliers didn’t have the products or infrastructure to comply with the new constraints, and they had to comply to be competitive, he said. That’s where SupplyPike saw its opportunity to step in.