After battle-testing its supply chain solution during the COVID-19 pandemic, TealBook is ready to take its intelligence platform global with $50 million USD in new funding from notable and strategic investors.
Since 2015, TealBook has been building its procurement intelligence platform to provide supply chain data to buyers. Using machine learning and artificial intelligence, TealBook’s goal is to help companies more easily source and access their suppliers’ data.
In late 2019 to early 2020, just prior to the flurry of health and economic issues caused by COVID-19, TealBook shifted its focus from building an interface to collect and disseminate data to using machine learning to supplement existing procurement software that enterprises may already use.
“Luckily, we started investing in those algorithms and our technology five years ago, and so we were already ahead of the market.”
As the pandemic hit and heavily affected supply chains, TealBook started to garner interest from major companies, including Fortune 500, looking to streamline their procurement processes. At the beginning of this year, TealBook secured $18.2 million CAD to capitalize on that pandemic-induced supply chain disruption.
Having found product-market fit and after hitting the gas due to COVID-19, TealBook is now ready to scale its offering.
“The biggest challenge is putting the pieces together and defining a category that never existed,” TealBook CEO and founder Stephany Lapierre said in an interview with BetaKit. “[Our] clients have never bought data this way before … they’ve never bought data as a core piece of their tech, and with the ability to improve the quality and insight over time to eventually become predictive.”
“So, defining a new category was the biggest piece of the puzzle,” she added. “Once we did, once we defined ourselves to be the supplier data foundation that powers the buy-side enterprise … we saw the market coming our way. And since then, it’s been trying to accelerate because the market is moving so fast.”
The Series B round was led by United States-based firm Ten Coves Capital, which has seen success investing in Canadian companies like Q4 Inc, 7Shifts, and TouchBistro.
“The truth of it is, companies struggle to maintain accurate and current supplier information, so the pain point is super real,” said Ned May, a managing partner of Ten Coves, who is joining TealBook’s board of directors. “Everybody’s feeling it, [and] the market opportunity for those who help solve the pain point is huge with tens of billions spent annually on supply chain and procurement-related software. TealBook is uniquely positioned to attack the opportunity.”
The financing included $40 million in Series B equity financing that features a mix of new and return investors, with RTP Global, BDC Capital, Reciprocal Ventures, Refinery Ventures, and StandUp Ventures following on. TealBook’s recent round also attracted Good Friends, an early-stage venture capital firm started by the founders of Warby Parker, Harry’s and Allbirds.
CIBC Innovation Banking supplied $10 million in venture debt. The round included a portion of secondary capital, though Lapierre declined to disclose the amount. The financing brings TealBook’s total capital raised to date to $73 million. The company also declined to disclose TealBook’s valuation following the deal, but called it “very good.”
RBC Ventures also took part in the round, with Lapierre noting RBC’s company creation and investment arm, along with return investors Workday Ventures and international financial information and data company S&P Global, provides strategic opportunities for TealBook in addition to financial investments.
TealBook has signed partnerships with S&P Global and Workday Ventures, the $250 million venture arm of enterprise management company Workday, to build solutions within each company’s network.
TealBook has two main products: its supplier data foundation, which integrates with companies’ existing procurement software and technology stacks, and its supplier data intelligence platform, which allows users to evaluate a global network of suppliers.
The pandemic proved to be a boon for TealBook. Many organizations sought out its help in the first few weeks of the pandemic alone after buyers either struggled to control or reduce their spending or sought to ensure a steady supply from a strained supply chain.
The interest in TealBook’s product also led it to work with customers in new verticals, such as financial services, entertainment, and consumer-packaged goods.
“The reality of any startup is that it’s a roller coaster,” said Michelle McBane, managing director for longtime TealBook investor StandUp Ventures. “What sets TealBook out from the pack is the ability of the team, under Stephany’s leadership, to pivot and zig-and-zag in response to the challenges and opportunities thrown their way.”
“The combination of cloud technology and the advancement in machine learning and things like that have enabled us to be able to build a solution,” said Lapierre. “Luckily, we started investing in those algorithms and our technology five years ago, and so we were already ahead of the market … now it’s about [how] we’ve learned so much that we’re able to scale much, much, much faster.”
Since January 2021, the startup claims has expanded to Europe, the Middle East and Africa (EMEA), and claims to have seen revenue growth of 350 percent. Its customers include Dropbox, Toronto Global, GSK, the University of Virginia, and Biomarin.
Lapierre expects TealBook to hit similar growth targets next year. She expressed interest for TealBook to hit $100 million in annual recurring revenue “as fast as possible,” with eyes towards taking the startup public.
In addition to unlocking typical supplier data, TealBook’s technology is also built to help companies find diverse vendors and to meet their environmental, social, and governance (ESG) goals. Lapierre argued that TealBook’s data and platform opens the door for companies to work with these women, Indigenous, veteran or LGBTIQ+ -owned businesses.
“When you add it all up, this could represent $50, $100, $250 million in additional spend that you were sitting on, you just couldn’t see it,” said Lapierre.
Noting TealBook’s diversity offering and broader supplier discovery capabilities, May claimed TealBook has “a tremendous asset at its core that will continue to scale and provides a number of expansion opportunities down the line.”