Berlin, September 15, 2021 – Lhotse, the Berlin-based Procure Tech company that enables automated tactical procurement for medium- and large-sized companies, raises €5 million in seed funding. The round is led by Cavalry Ventures with participation from existing investor Paua Ventures, who led the pre-seed round just 6 months ago. In addition, a number of prominent entrepreneurs are also participating, including Patrick Andrae (Founder HomeToGo), Felix Jahn (Founder home24, Founder McMakler), Philipp Klöckner (Doppelgänger Podcast, KKR Advisor), Christopher Oster (Founder Clark) and Katharina Gehra (Founder BlockchainFonds by Immutable Insights) as well as others.
„Digital champions have already revolutionised back and front office functions for finance, HR, sales and marketing. We see ourselves in this tradition and want to build the next-generation digital purchasing system with Lhotse so that medium- and large-sized companies can also benefit from efficiency gains resulting in time and cost savings in purchasing. With our VCs and business angels, we are uniquely positioned to do this,“ says Henning Hatje, Co-Founder and Managing Director of Lhotse.
The B2B venture founded in 2020 by Henning Hatje, Jan Berssenbruegge and Can Akin drives measurable savings by reducing spend and increasing process efficiency within tactical procurement. Thanks to automation and the use of AI, the solution consolidates all important information in one place. Using Lhotse, the buyer can access an automated compilation of all suppliers and previous orders, have alternative suppliers suggested from the proprietary Lhotse supplier database and automatically receive competitive offers.
Inefficiencies due to fragmented procurement
Tactical procurement includes expenditure in areas such as IT, marketing, sales and facility management. In many companies, tactical procurement accounts for about 20% of total expenditure, but the associated effort can be a multiple
of this. In addition, there is great efficiency potential in simplifying cooperation with internal stakeholders and external suppliers. According to study results from the management consultancy BCG, digitalisation in purchasing can save 5% to 10% of spend and increase process efficiency by 30% to 50%. “Our customers use Lhotse to optimise the purchasing process for a diverse range of products and services. The range of optimisation extends from the procurement of safety gloves and office furniture to complex IT services, such as services for the maintenance of cloud-based systems,“ says Henning Hatje.
The investment by Paua Ventures and Cavalry Ventures underscores the two investors‘ belief that the time has come for innovative, digital SaaS solutions in procurement. „Lhotse‘s founding team brings a tremendously helpful wealth of experience from previous project work with large enterprises at BCG. They have experienced the immense untapped potential in procurement processes and developed an excellent product, which also shines with excellent UI and UX. We rarely see this in B2B products of this nature. Just one year after their founding, they are already supporting numerous major customers, from start-ups to medium-sized businesses. With this, the Lhotse team proves that they are ideally equipped to take over the leading role as procurement SaaS and absolutely have their finger on the pulse,“ comments Rouven Dresselhaus, Managing Partner at Cavalry Ventures.
“Procurement is one of the last bastions within the Enterprise where digitization is still in its infancy,” says Felix Plapperer, Principal at Paua Ventures. “Procurement teams spend a substantial amount of their time to align purchase requests for products and services with their internal business partners and external suppliers. Lhotse provides them with superpowers by means of automation and data intelligence. The team has built a highly scalable product that customers love in a short timeframe. We are very excited to support the team in becoming the category leading software vendor within the tactical procurement market.”
Fast ROI thanks to linking data with intelligent process automation
For each procurement request, Lhotse automatically identifies the right suppliers, obtains quotes and optimises communication between buyer and supplier. Finally, Lhotse provides the customer with an overview of available purchasing options and suppliers.
Only one year after its founding, Lhotse already counts several medium- to large-sized companies as well as leading tech companies among its customers. One of the early Lhotse customers is media company FUNKE Mediengruppe. „By working with Lhotse, we have all available purchasing options and suppliers in sight at the same time and in one place. Our procurement teams benefit from greater efficiency,“ says Gundula Ullah, Chief Procurement Officer of FUNKE Mediengruppe.
Lhotse is a Berlin based B2B SaaS procurement solution, for all non-strategic (tactical) procurement. Founded in 2020, by Can Akin, Jan Berssenbruegge and Henning Hatje, the company links data with intelligent process automation in order to enable organisations to manage their procurement activities more effectively.
Lhotse is the next-generation digital purchasing system – with a focus on designing state of the art UI & UX. For any purchase request, Lhotse seamlessly identifies all relevant suppliers, attains competitive offers and optimises communication and collaboration between buyer and supplier. On top of that, Lhotse provides buyers with insights into the capabilities of their suppliers. The customer focus is primarily on medium- to large-sized European organizations, as this segment shows the greatest untapped potential for optimization. Lhotse is used by large corporations such as KWS SAAT and FUNKE Mediengruppe. Lhotse pursues the overall goal to empower and optimize the next generation of procurement.
About Cavalry Ventures
Cavalry Ventures is a European early-stage venture capital fund focusing on pre-seed and seed stages. With the launch of the second fund generation in 2019, Cavalry Ventures manages a total volume of 120+ million euros.
Cavalry Ventures was founded in 2016 by Rouven Dresselhaus, Claude Ritter, Stefan Walter, Markus Fuhrmann, Marcel Hollerbach, and Dominik Matyka. In addition to the expertise of the partners, the portfolio companies gain access to a cross-sector, global and exclusive network of more than 200 angel investors, entrepreneurs, scientists, business experts, and many more, who provide advisory and operational support in areas such as strategy, organisational development, product development, sales, international expansion, recruiting and marketing.
The portfolio comprises more than 40 companies such as Forto, McMakler, Planetly, BRYTER, and PlanRadar. Cavalry Ventures is headquartered in Berlin and invests across Europe.
In 2021, Cavalry was awarded the „Hottest Seed“ award at The Europas Tech Startup Awards.
About Paua Ventures
Paua Ventures is a venture capital firm that’s backing exceptional European founders who leverage technology to solve complex B2B problems. Founded in 2010, the Berlin-based investor is one of Europe’s leading early stage venture firms investing in B2B SaaS, Enterprise Software and Deep Tech Startups. Numerous SME & blue chip executives as well as leading tech entrepreneurs are active members of the Paua Ventures community & investor base. Leveraging this network enables Paua to offer a “first-customer(s) guarantee” to all its early stage portfolio companies. Beyond its network, Paua acts as an entrepreneurial sparring partner and hands-on supporter in talent acquisition. Since its launch, Paua Ventures has invested in more than 35 start-ups and counts companies like Stripe, Pipedrive, Wandelbots or Detectify as part of its portfolio.