IndiaMART-backed ProcMart makes B2B procurement simpler, cost-efficient. Here's how
For a majority of businesses in India, the past two years have been about finding ways to snip off redundancies, and, to the extent possible, reduce inefficiencies.
In fact, companies and businesses that have been able to digitise legacy processes that take time, effort, and resources to manage, have been faring much better than counterparts that haven’t.
When Anish Popli—an engineer from NIT Trichy—was introduced to procurement technology during his stint with Bharat Heavy Electricals Ltd (BHEL), he recognised the potential to do more, especially in terms of digitisation.
After studying the space and uncovering evidence of excessive redundancies in the process of indirect procurement for businesses, he decided to solve the issue and set up(Instant Procurement Services) in 2015.
For a business to function, it needs raw materials necessary for its operation, as well as products and equipment which may not be directly related to the final product.
A beverage company, for example, needs machinery, ingredients, and packaging material — which makes for the company’s core expenses — to manufacture a bottle of soda.
However, it also needs ancillary equipment such as gloves, masks, helmets, etc., which are not part of the final product, and sourcing of these materials falls under indirect procurement.
"With ProcMart, I wanted to address the issue of high operational and logistics costs, an unorganised supply system, and a lack of quality assurance and monitoring in this industry," Anish Popli, Founder and CEO, ProcMart, says.
The Delhi-based startup has raised seed and pre-Series A funding from investors, including Dinesh Agarwal, CEO and Founder, IndiaMart.
What it does
Essentially, ProcMart eases the way companies do indirect procuring.
Traditionally, a company would place orders with its preferred list of vendors, each specialising in a particular item. For a mid-sized company, that could be anywhere between five to 5,000 separate items.
To be able to procure all the items, the company would have to get in touch with all the suppliers, make separate payments to them, manage logistics independently, and keep track of each item and supplier availability separately. The process is time and resource-intensive, and a lot is required to ensure the supply chain keeps moving.
ProcMart cuts through the inefficiencies by bringing all parts of the indirect procurement process onto a single platform, acting as the single point of contact between businesses and suppliers.
It creates a customised interface for each client company that captures its procurement needs, creates an easy-to-access list of things needed for daily function, and collaborates with suppliers, logistics, and accounts operations to fulfil these orders.
Some of ProcMart’s solutions include:
- Vendor consolidations, where it collaborates with suppliers to build an accessible and comprehensive procurement system
- E-cataloging and inventory management service that helps businesses keep track of their inventory
- Digital procurement, where the startup helps businesses conduct their indirect procurement activities online. It also analyses purchase methods to create consumption models to help suppliers and buyers reach out to each other efficiently
- Expense tracking and accounts payable processing
- Centralised logistics to track all orders on a single platform
Anish says, "ProcMart’s platform enables buyers to forecast business ﬂuctuations versus expected demand and advises strategies to improve their business’ bottom-line performance. Creating a customised catalogue specific to a business’ requirements helps enhance the procurement process."
At present, the Delhi-based startup has over 5,000 suppliers in its network. Its clients include PepsiCo, Colgate, Kellogg’s, Cargill, Mondelez International, Diageo, and Vedanta, among several others.
"The advantage of associating with ProcMart is the discretion we provide to businesses while picking indirect materials and options for annual or quarterly rate contracts, which offers reliable cost reductions and long-term protection against unforeseen events such as inflationary threats or supply chain disruptions," Anish explains.
Business model and profitability
According to Grand View Research, the global Procurement-as-a-Service (PaaS) market is expected to grow to $13.58 billion by 2030 at a CAGR of 10.4 percent.
Further, the Asia-Pacific region is expected to grow at the fastest pace, owing to a rise in demand for digital solutions, growing internet usage, and demand for new sources of supply.
ProcMart acts as the intermediary between suppliers and customers, where it buys from the supplier and sells to its clients. Besides the platform and solution usage charges, the startup charges a commission on the sale across categories and SKUs.
In 2021-22, the startup processed over 14,500 purchase orders. Its revenue for the last fiscal year exceeded Rs 100 crore, growing at a rate of 2.5X annually.
ProcMart’s annual recurring revenue (ARR) is more than Rs 200 crore. In 2018, the startup turned profitable after it onboarded Colgate Palmolive as one of its client companies.
Its competitors include B2B procurement players, including, , , , and , among others.
With a presence in India and Malaysia, ProcMart is looking to raise fresh capital to fuel its international expansion. It plans to expand to Australia and Vietnam.
(This story was updated to remove a reference to a specific company from the sixth paragraph.)