From early struggles to a big deal with BigBasket: the SourceEzy story
The e-procurement market is $5.5 billion in size and is dominated by legacy companies like SAP and Oracle. Here is why Deepak Ramesh’s startup makes sense for enterprises.
Deepak Ramesh was an ace cricketer in Karnataka before quitting at a young age to pursue a corporate career.
After working in the corporate sector for more than 20 years with experience in sales and consulting roles, Deepak realised that enterprises were losing money working with vendors.
A small company, worth Rs 6 crore in size, works with at least 10 vendors for everything, from raw materials to stores.
In this industry pricing is not transparent as companies do not have the bandwidth to find new vendors. They are stuck in the comfort zone of relationships and do not want to risk working with new vendors because there is no technology linking vendors on a real-time basis.
According to report from the software company GEP: “E-procurement is the electronic implementation of the procurement cycle that covers steps from spend analysis, identifying requisitions, and setting up contracts with suppliers to the actual purchasing of products and evaluation of these suppliers.
Studies indicate that procurement technology has helped professional consultants significantly reduce the time spent on completing procurement cycles by an average of 40 per cent.
Traditionally without the help of exhaustive technology applications, a procurement cycle took approximately five months for a sole category. In the past 10 years, the influx of technology has automated many aspects of the process and helped simplify labour-intensive tasks, while shortening the cycles down to about three months.”
Chief procurement officers and Chief Financial Officers are Deepak Ramesh’s target, and they are as important as chief security officers and chief marketing officers. They are the oil that keeps the company running smoothly.
Forty-four-year-old Deepak Ramesh saw this as an opportunity and founded SourceEzy, an e-procurement SaaS product in 2012.
According to research firm Apps Run the World the e-procurement business is expected to be a $5.5 billion industry in opportunity globally. It is dominated by SAP and Oracle.
However, this is where startups can be disruptive. “The idea came while I was working in Dubai and noticed that every company needs to reach new vendors, but do not know how to and find reduced prices,” says Deepak.
The company was founded in 2012 with little capital. “I spent a lot of time trying to convince companies to go digital for procurement. It took me three years and meagre revenues to find my feet in the market,” says Deepak.
In 2015 Ramesh was struggling and was disappointed that he was running out of money to keep his business afloat. “I was neck-deep in debt at the time with only one or two clients,” says Deepak.
Chance meeting brings change
But, hard work always pays off. A chance meeting with a supply chain expert and investor, Alwyn Santhumayor, changed Deepak’s life. He invested in the company because e-procurement was still dominated by legacy companies who sold expensive licences, which could be bought only by top 5000 companies of the world. After Alwyn brought the idea that the cloud based software could democratise e-procurement, he put in a large seed sound into the company. Ever since, SourceEzy has been able to acquire 30 customers. The good thing was that his software came to be recognised by some of the best Indian companies and one of them was BigBasket.com.
Deepak had earlier worked with the founders of BigBasket.com in their days as FabMart and FabMall. BigBasket.com, which has more than 60,000 orders per day wanted a technology that could streamline all their backend orders. They validated Deepak’s product to be dynamically capturing details and prices of all their vendors and recently signed a three-year e-procurement deal with SourceEzy to source over Rs 100 crore of product in the next three years.
The contract will comprise the entire e-procurement requirement of the company including capital expenditure, operational expenditure, and services.
It uses SourceEzy's software to capture internal requisitions, send out requests for product information and quotations, conduct e-auctions, and send out online purchase orders.
"The contract can generate savings of 10 percent on its procurement exercise in the next 12 months," says Ramesh.
How does the product work?
- Receive requisitions from different departments. Use the collaborative approval workflow to approve unbudgeted requirements.
- e-RFI's - Send questionnaires to prospective vendors and compare responses. Create RFQ's online, manage, and track all enquiries sent out to vendors.
- Receive initial prices online. Receive stamped quotations, technical specifications and documents. View Instant Pre-bid Reports.
- Use a variety of best in class Reverse and Forward Auctions to negotiate the best prices from various vendors. Save time during negotiatons and ensure transparancy and auditability in the negotiation process.
- Search for vendors based on category and get instant access to a large number of vendors locally and globally. Our dedicated team reaches out to new vendors for the products and services being sourced globally.
- Easy to access online Vendor Evaluation post negotiation with a collaborative approval process online.
It is a product that connects the ecosystem seamlessly and allows new vendors to apply on SourceEzy system.
“These businesses must scale up fast and have long term contracts with as many paying customers as possible,” says Naganand Doraswamy, founder of IdeaSpring Capital.
Deepak finally saw his startup going up to half-a-million in revenues. He now believes he can scale up the company in to a multi-million dollar company with the technology.
While Deepak’s startup journey may have not been easy in the initial years, he certainly has made it easy for companies to use SourceEzy.