Tropic’s Journey to Intelligent Spend Management

When I decided to start Tropic, my guiding principle was to build a technology platform that defends and empowers an underdog. After selling to businesses from sub-50 employees to the Fortune 50, I couldn’t ignore a glaring problem in spend management. 

When I interviewed a procurement professional and asked why companies weren’t able to effectively manage their spend, the phrasing of the answer stuck with me: “Look, no one wants to eat lunch with the procurement team.” Metaphor or not, I’d found the underdog I was looking for. And they were in desperate need of resources. 

Justin Etkin and I teamed up to understand why spend management had become so broken. We saw companies investing 10s of billions of dollars of their spend into technology to empower their sales and marketing teams, but less than one tenth that amount into managing the spend.

But the idea of disrupting spend management was a novel concept in 2019 when we set out to raise our first capital. The investors who didn’t get it said, “Tech companies don’t care about managing their spend. Why not focus on growth?” 

While the sales tech market continued to explode, we became committed to helping empower the Rebel Alliance of finance and procurement professionals to take on Death Star platforms like Microsoft, Oracle, Salesforce and Adobe. In other words, it was time we start making technology a buyer’s market and level the playing field.

2019-2022: Procurement-as-a-Service

After a cursory look, we determined that 100% of sources for information on suppliers were actually paid for by the suppliers. Incentives drive outcomes in tech, and there was no avenue for the data our target market needed.

We saw a Holy Grail opportunity to build the database we wanted, including commercial data and qualitative data on which platforms perform. If we could deliver on this promise, buyers would at last have the same information as sellers in every transaction. 

We launched our procurement service and a lightweight contract repository to accomplish this goal and tripled revenue from 2019-2022.

2023: SaaS 2.0 Launch

What most people don’t know is that our services products did (and do) a lot more than negotiation. 

We also solved the “process” problem for our customers by managing the process for them, including contract metadata extraction, stakeholder management, supplier communications, and more.

To deliver on the process better, we built a platform called “Tropic Next” that our services team used to deliver value to our customers. We quickly realized there was an even bigger market for a self-serve version of this platform.

We released this into the market in early 2023 and saw our SaaS business take off, growing 10X YoY and continuing to accelerate. 

Tropic was officially a SaaS and Services business. And after a year of operating in this model, our dataset reached the maturity required to unlock the dream we had when we started, Intelligent Spend Management.

2024: Intelligent Spend Management

Today, I’m proud to say we’re at last delivering on our promise. With the rapid advances in artificial intelligence (AI), we have a dataset that gives you the purchasing power of our entire network of information from every transaction we’ve ever seen.

You can run reports, explore, or even talk conversationally with our data model. The questions it can answer for you are the difficult questions posed to me by everyone I interviewed in 2019. 

• Where am I overspending relative to my peers? 
• How can I decrease my fees with this supplier? 
• Where am I paying for things I don’t need?
• Where do I have the biggest commercial risk? 

By integrating our intelligence directly into your workflow, you can run a streamlined process across your business, manage a virtual procurement team at a fraction of the cost, and escalate to one of our experts when you need to. 

This is what spend management looks like in an AI-centric world. That first underdog I interviewed is a customer now, using the solution they helped us dream up. It seemed impossible then, but is inevitable now. And the best is yet to come. 

Request a demo to see what Tropic is all about.