Our journey with Tacto began on April 27th, 2020, with an introduction from Michael Wax, Co-Founder of Forto, a close friend and entrepreneur Rob had backed previously. Meeting with André, Johannes, and Nico was not just about assessing an investment opportunity. We met a highly motivated team of curious builders in the earliest stages of exploring a non-obvious space: Procurement.

At Visionaries Club, we love meeting founders way before they start their companies. This early phase is incredibly telling, more so than post-inception meetings. It reveals how swiftly founders make decisions, their approach to problem-solving and hypothesis testing, their openness to input while maintaining a clear, personal opinion, and their level of commitment and obsession with the problem they aim to solve. It also shows their thought process on team building and their willingness to take risks for their idea. These aspects are crucial in differentiating the ‘achievers’ from the ‘almost achievers’. This distinction becomes more apparent before a founder raises money. At this stage, they are unbiased, driven solely by their vision and the courage to make clear decisions, which can get clouded post-fundraising when the focus shifts to executing a set path.

In the three co-founders of Tacto, André, Johannes, and Nico, we found these qualities in abundance. Their velocity, can-do attitude, humility, and focus on truth stood out distinctly. They had a clear opinion, free from the influence of herd thinking. It was evident that we wanted to back a team dedicated to building something new from the ground up. Their approach was fact-based and customer-centric, not only driven by broad hypotheses or market trends. They were prepared to get their hands dirty to identify the real pain points and develop true “painkiller” product features.

By June 12th, our conviction in their vision and capabilities led us to sign a term sheet to lead Tacto’s pre-seed round. This marked our commitment to incept a company with the potential to redefine Industrial Procurement. The team was further strengthened by the addition of great strategic angels like Torsten Reil, Michael Wax, Johannes Reck, Hanno Renner, and our friends from UVC to co-lead the round. A kickoff workshop at our Visionaries Club office on June 17th, followed by a dinner, officially began this exciting venture.

Three years in: Enter Tacto

Over three years, Tacto has built an impressive, highly modular product from the ground up. This is exactly where the magic of teams in the top 0.1% happens. No path from idea to product-market fit is perfectly linear. André, Johannes, and Nico excel at iteration: the mastery of constantly building blocks, tearing down parts, and sculpting the product.

The initial discussions we had about Robotic Process Automation (RPA) software for Procurement evolved as they realized that a mere ‘orchestration’ tool is not what industrial Procurement teams need. Tacto had to transform into a comprehensive Operating System capable of enabling Strategic Procurement execution.

Today, Tacto stands at the forefront of building AI-based, future-proof supply chains. They have created a data-driven foundation for Strategic Procurement that integrates seamlessly with existing legacy systems and data fabric, ensuring rapid deployment for SMEs. The platform automates operational workstreams like RFQ, Supplier Onboarding, and Compliance while providing a single source of centralized data insights. These modules are mission-critical for ensuring supply chain reliability and aiding strategic decision-making in Sourcing & Purchasing.

We are beyond excited to welcome Sequoia Capital & Index Ventures, with Luciana Lixandru and Carlos Gonzales joining the board.

Our Conviction in the Tectonic Shifts in Industrial Procurement

Since 2018, we have been delving deeply into the Procurement vertical with Visionaries Club, speaking to our industrial network and identifying the broken components of the value chain in Direct and Indirect Procurement. This exploration confirmed a spiking market pull for a novel Direct Procurement Operating System for SMEs — a strong ‘painkiller’ in the SaaS space.

With Procurement accounting for more than 50% of total costs in industrial companies, and considering Europe’s 90k mid-cap companies generating €6tn in GDP and employing 30 million people, the impact of a solution like Tacto’s is enormous.

How does AI fit the picture of Future-Proof Supply Chains? Our firm belief in AI’s transformative potential, especially within the application layer of enterprise software, remains strong. The distinct advantage of proprietary data in AI sets transient trends apart from lasting change. In this domain, AI’s most significant profit pool opportunities will be unlocked. Boasting a solid industrial mid-market foundation, Europe stands at the forefront of leading this transformation.

An In-Depth Hypothesis: The Evolution and Current State of Procurement

Companies entrenched in the industrial sector, forming the backbone of our economy, have traditionally operated offline. They have been involved in the production and trade of physical goods for decades, some for over a century. A pivotal moment in this landscape occurred in the late 90s with the emergence of ERP (Enterprise Resource Planning) systems. These systems represented the first primitive ‘digital twins’ of businesses, encapsulating the entire value chain — from sourcing and production to sales.

Within ERPs, Procurement has been a crucial component, alongside manufacturing, inventory, order management, accounts payable/receivable, and human capital. The rise of cloud software dramatically altered the landscape. Applications like CRMs (e.g., Salesforce), Human Capital (e.g., Workday), and Procurement (e.g., Coupa) revolutionised these functions with superior applications and workflows.

Initially viewed as a transactional cost center, Procurement began transitioning into a strategic element of the business value chain, driven by advancements in cloud applications.

Our conversations with family business entrepreneurs and our industrial network at Visionaries Club underscored Procurement as a vital yet intricate area, particularly for SMEs.

  • Data Dispersal and Operational Challenges: SMEs face the challenge of fragmented data across various systems like ERPs, spreadsheets, emails, and documents. This dispersal complicates strategic planning and budgeting, leading to obscured insights into direct spending.
  • Supply Chain Visibility and Strategic Sourcing: There is a pressing need for transparency in supply chains and effective strategic sourcing methods. Current limitations hinder negotiation, vendor assessment, and supply chain risk management.
  • RFQ Execution Inefficiencies: SMEs often rely on outdated methods such as email for Request for Quotes management, leading to delays and a lack of essential contextual data about suppliers.
  • Supplier Onboarding Complexity: The onboarding process involves extensive data collection (e.g., Know Your Business, Legal) from various internal and external sources, making it cumbersome and time-consuming.
  • Regulatory Compliance Challenges: Adapting to a dynamically changing regulatory environment (e.g., ISO, ESG standards) and managing compliance data across disparate systems poses significant legal risks, operational inefficiencies, and excessive spending on consultancy services.

As we reflect on Tacto’s journey, we feel incredibly fortunate that we had the opportunity to meet André, Johannes, and Nico. The story emphasises the ethos of Visionaries Club. It underscores the source of our very personal fulfillment: our commitment to identifying foundational changes in industries, our belief in backing and nurturing contrarian founders right from the outset, and our confidence in the transformative power of technology in reshaping Europe’s industrial landscape.