On Global Startup Report, Founder Institute was excited to be joined live by Focal Point Founder & CEO Anders Lillevik for an exclusive interview, following the company's $3M seed funding round announcement.
Focal Point, an Austin Founder Institute portfolio company, builds all-in-one software for tracking and optimizing enterprise-scale procurement processes. Participating investors in the round included Susa Ventures, Amplo, GoPoint Ventures, Bungalow Capital and Operator Partners.
As CEO Anders Lillevik explains, procurement technology is still today, perhaps surprisingly given its enormous scale, stuck in the recent past: with work done almost exclusively inside Excel spreadsheets. Focal Point is the platform that is today (finally) bringing enterprise procurement into 2020s modernity, with purpose-built tech.
Watch our full July 2022 interview with Focal Point Founder & CEO Anders Lillevik here, or read the highlights below:
Key Founder Insights & Highlights:
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How Focal Point's key solution insights were directly gained from experiencing the problems firsthand, during the founder's previous career as a corporate executive in banking and procurement
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Background: procurement is a top line-item on almost every large company's expense sheet; and yet enterprise purchasing processes today are still fragmented, and managed primarily in Excel spreadsheets
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Why (often) the first person a founder needs to pitch their startup idea to is (and should be) their spouse or partner
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Value of the Founder Institute core pre-seed accelerator, particularly for a founder who brings tons of industry experience, but has little experience in starting a new business from scratch
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Selling to enterprises and big brands as a startup founder, and how strong advisors and investors on the cap table can help with B2B sales cycles and business development
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Startup team hiring: for "Aptitude and Attitude"
Large companies buy and rent very many different things: they are the biggest buyers on many sellers' customer lists, and their regular operating capital creates wider impacts throughout the rest of the economy. They of course buy products, services, rent real estate, and much more, spending billions - but managing big business processes for how all this buying takes place—and how enterprises can actually improve procurement—is a huge need today.
In our livestreamed conversation, Focal Point Founder & CEO Anders Lillevik shares how, through his previous career as a senior procurement executive and consultant, he came to realize the enormous scope of the opportunity at hand: a burning need for better tech solutions in the enterprise procurement space. He explains the motivating events leading up to his entrepreneurial 'ah-ha' moment this way, saying,
It's a passion project for me, I really see a need in this space—there's large monolithic software companies that aren't really addressing the full end-to-end process—and that's where I'm going, that's what I'm going after by building this solution.The penny drop moment for me, was when I was consulting for a large company (one that you would all know by name), and I was helping them select their procurement software suite.
"And at the end of the project... he looked me straight in the eye (and I'm cleaning this up significantly for the audience here) and said, 'Are you telling me I'm going to spend a million and a half dollars on procurement software, and still manage all of my stuff in Excel?' And that was the 'penny drop' moment for me—and on March 18th of 2020, right before the world stopped, I founded the company and started [working on Focal Point].
While the processes following the point of invoicing and expense accounting are managed relatively well today though existing modern systems, everything else leading up to that phase (from managing people, to load balancing across teams, to managing compliance) is all primarily still done manually. Focal Point CEO Anders Lillevik explains,
When I was a Chief Procurement Officer for a large financial institution, we spent almost $12 billion on goods and services per year, and managing that from soup to nuts takes a lot of work and a lot of coordination—and really the infrastructure space has left this piece behind.
"The major components that go into an ERP are typically done well. For example: when using an ERP for accounting purposes, it is fairly straightforward to track invoice payments, purchase orders, and contracts. However, everything that leads up to that point is still executed manually and on an individual basis. Orchestration and data is the thing that we address [at Focal Point].
The scale of the enterprise procurement space is hard to overstate. As CEO Anders Lillevik outlines, procurement is nearly always the second largest single expense line item for most large businesses,
If you think about any company out there, predominantly the number one expense is people costs including salaries, HR, etc. The second is money spent on goods and services and the third is typically third-party rents. In aggregate, almost 40 or 50 percent of the total expenses go to third parties. So, as a company becomes a certain size they're literally putting through billions of dollars in expenses.
Following their previous ~$500k pre-seed round, CEO Anders Lillevik explains that Focal Point successfully onboarded 4 large enterprise scale customers, managing to demonstrate strong early product market fit. Those leading metrics firmly demonstrated the company's traction to date, helping to close their recent $3M seed funding round.
This investment will enable Focal Point to accelerate adoption of its platform, build enhanced software functionality and capabilities, add industry executives to its leadership team—and with his eye already on a likely Series A in another year or so, Focal Point CEO Anders Lillevik's focus is on continuing to hit key metrics and milestones: enhancing the platform's features, and onboarding more target enterprise customers, saying,
We are continuing to close enterprise blue chip brands as a startup, which is fairly unique. Our clients are brands that you are familiar with and/or most likely customers of. For us, it's about staying laser-focused on our product development to ensure we meet the needs of the enterprise because this is such a target-rich environment for our solutions.
To learn more about the all-in-one platform for managing enterprise procurement, visit GetFocalPoint.com
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