AI-powered procurement company Tealbook raises US$14.4-million in venture financing

Finding the right suppliers to make new products is hard enough. It got even harder after the pandemic threw global supply chains into disarray – but it led to an explosion in attention for a Toronto company that uses artificial intelligence to connect businesses with the right suppliers.

Since 2014, Tealbook Inc. has been helping organizations find suppliers with a platform that sifts through data to connect them with the right partners for their needs. At the pandemic’s outset, companies and governments suddenly needed to find materials, manufacturers and partners to make personal protective equipment and other gear to protect against COVID-19.

So Tealbook began offering free reports with supplier data to those organizations, and nearly 170 of them took the offer, the company says. Suddenly in the limelight, founder and chief executive officer Stephany Lapierre said the company’s sales pipeline ballooned by 600 per cent.

The Toronto company announced on Tuesday that it has raised US$14.4-million in venture financing to boost its data, sales and marketing teams and global reach at a moment when getting things from Point A to Point B is harder than it has been in decades. London- and New York-based early-stage technology fund RTP Global is leading the round, with participation from seven investors, including business-information giant S&P Global Inc., and debt funding from Silicon Valley Bank.

Tealbook’s platform connects with common procurement software, using data science and machine learning to help buyers such as chief procurement officers sift through intimidatingly large, globe-spanning supplier lists. A company or product’s quality, timeliness and trustworthiness are only as good as their component parts. “Your suppliers are the lifeblood of your company, in many ways,” Ms. Lapierre said in an interview.

Because of inconsistent, hard-to-search data sources, companies often sign deals with suppliers they know little about. This can come with a host of problems, one of which can be incessant delays, she said. “You could never really get visibility, and that’s really what’s paralyzing organizations.”

Last October, vice-president Elouise Epstein of global management consultancy Kearney, which specializes in supply chains, said Tealbook could be a key component of the “data foundation” of procurement’s future. The company has already hired a dozen new data scientists since closing its latest financing round and plans to boost its total staff to more than 80 from about 50 by the end of the year.

Ms. Lapierre comes from the world of supplier sourcing in the health care and biotech industries, and spent a decade building out a procurement consultancy. Even with the best software, Ms. Lapierre said, historically it’s proven difficult to sift through the mountains of data they provide. So Tealbook built itself around data instead of just making another software offering, connecting its platform with industry-leading software made by such firms as Beroe Inc. and Jaggaer LLC.

“They’re covering a massive swath of the procurement space simply by partnering with folks who are in the space,” said Jules Schwerin, a partner with RTP Global, in an interview.

In 2017, Tealbook was the first investment for StandUp Ventures, one of just a handful of Canadian tech investors that pledges to invest in female-led companies, arguing those companies are underserved by venture capital yet deliver better returns than companies with all-male founding teams. StandUp returned for this new Series A financing round, impressed by the focus that Ms. Lapierre had in executing Tealbook’s long-term vision for procurement teams.

“She always understood where the data side of things was fundamentally broken,” said Michelle McBane, StandUp’s managing director. The help Tealbook has lent organizations in sourcing supplies during the pandemic has given the company significant momentum, she added. “All the building blocks are in place for the next year or two, to really execute on what they have to do.”

The granularity of Tealbook’s data is also beneficial for organizations hoping to support small suppliers in their local market, or those that might face structural disadvantages, such as LGBTQ-owned and Black-owned businesses. Tealbook’s data can help buyers seek out these suppliers. In August, the company also began offering free reports to potential clients to assess how inclusive their supply chains were.

“That speaks to the tone, culture and values of the company,” Ms. McBane said.

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