From Startup Wise Guys to investment from the private sector, procurement control company breaks all the rules of Estonia naysayers
Buying goods and services for corporations should be modernized. But despite being a multi-billion dollar sector, the procurement industry is woefully outmoded.
DeltaBid procurement management software founders Erkki Brakmann, Rain Öpik, Andres Kuuse and Jan Dimitrov have set their sights on revolutionizing this most critical of supply chain functions.
Graduates of Estonia’s flagship incubator Startup Wise Guys, DeltaBid have already received healthy startup and innovation grants from Enterprise Estonia. As of September 2013, the firm boasted corporate clients across Europe including Vox Supply Chain, Gaasivõrgud, ABB, Eltel Networks, Tele2, T-Tammer and Danpower Eesti.
Vox Supply Chain also recently signed on as a strategic partner and investor.
“The transparency, uniformity and reliability that DeltaBid delivers to our global team of buyers has led to very significant time and efficiency savings in our dynamic environment,” Vox CEO Arnold Engel said in a statement. “We’ve been so impressed with their product that we’ve become a strategic investor and partner, in addition to being satisfied users.”
Brakmann credits DeltaBid’s experience at Startup Wise Guys with helping the team design a product from day one that was based on real customer needs.
“Startup Wise Guys gave us excellent mentors and a fantastic network that encouraged us to develop in tune with our customers through thoughtful outreach and feedback,” he said.
Enterprise Estonia’s decision to invest in the team seems downright prescient. Critics of Estonia’s tech industry contend that the nation’s startups are benefitting mainly from government largesse and not private sector investment. But DeltaBid’s success with strategic investors and partners just months after graduating from Startup Wise Guys subjects such attitudes to criticism.
The idea for DeltaBid came to Brakmann after working for six years within private sector procurement. He was amazed to see sales departments using top-of-the-line customer relationship management and enterprise resource planning software, while procurement remained steady within the 20th century. “The procurement sector used a combination of email, Excel, and even traditional mail,” he said.
Brakmann’s childhood friendship with co-founder and CTO Öpik, a seasoned IT specialist with four years at AS Smarten Logistics, led the two men to begin collaborating on the project. Kuuse joined the team with marketing and a background in procurement, while Dimitrov, who is German, brought an extensive background in international procurement to his responsibilities for overseeing DeltaBid’s sales.
DeltaBid brings a new level of transparency and accountability to the procurement process, the team said. While this addresses some of the corruption that is rampant in former Soviet bloc countries, it can also help resolve shady procurement practices and no-bid contracting in the United States that would make Tony Soprano proud.
DeltaBid’s effort reflects a priority of the Estonian government, which has set bold goals using IT-based solutions to become one of the world’s least corrupt countries.
Speaking at a conference in London, Foreign Minister Urmas Paet was quoted by Baltic Business News on this point: “In the last 10 years, 130 million digital signatures have been given in Estonia. This is a remarkable amount when taking into account that Estonia’s population is 1.3 million.”
DeltaBid also tackles inefficiency within the bidding and procurement sector. Currently, if a company wants a contract they must jump through several hoops to ensure they qualify for the job. This puts smaller companies with fewer resources at a disadvantage. As a result, larger companies monopolize contract work, stifling competition and paving the way for higher bid prices.
DeltaBid counters this problem with a one-stop-shop solution promising to make procurement “as easy as email.” Using proprietary technology designed and coded in Estonia, DeltaBid offers cloud-based software that takes over the entire process of contract allocations from the initial request for proposal to establishing ongoing communications between procurement officials and suppliers.
DeltaBid’s user-friendly, centralized system cuts the time and costs of managing a contract budget operation. In fact, the company says it cuts client costs five percent while reducing procurement time by 25 percent.
While such statistics are impressive, deploying DeltaBid’s technology also brings intangible benefits including helping contract officers to select the “right” company for a job. By streamlining the whole process, DeltaBid gives back the time wasted on paperwork and outmoded technology so that it can be used on a sound evaluation of cost and contractor capabilities.
“We plan on keeping our development here in Estonia,” Brakmann said, “but as we are aiming to bring DeltaBid to larger markets, we are experimenting with different marketing events and strategies, including basing sales teams or forging partnerships in different regions.”
Over the next year, DeltaBid expects to grow its private sector presence gradually in the U.S. and in several African countries.