B2B Payments

Why Mark Cuban Invested in e-Procurement

Mark Cuban is a very successful investor with billions of dollars to show for smart picks. His rather “eclectic” taste for startups makes it hard to judge the objective value of his seal of approval. But for tiny B2B procurement start-up Procurify, Cuban’s recent high profile infusion of $400K into the company might be just the boost it needs to gain the market’s credibility to support an ERP solution that can break the small-and-medium sized businesses dependence on inefficient paper-based systems.

It’s hard to know the objective value of the “Mark Cuban Seal of Approval.

On the one hand, the Dallas Mavericks owner didn’t become a billionaire by accident, as an investor he has a track record of success across diverse sectors including  sports, entertainment, data analytics, social networking software and  beacon technology, among many, many others.

On the other hand, Mark Cuban also has a reputation for being something of a promisicous investor.  He invested $25K in in a company called “I Want To Draw You A Cat,” on national television.  “I Want To Draw You A Cat” is not a clever euphemism, that is exactly what the company does.

Still, for an Aman Mann, the founder of Procurify,  the “Mark Cuban Seal of Approval,” may be just the bump the fledgling company needs to attack the massive collection of underserved needs in the B2B payments marketplace.  Mann secured $400K in investment funding for his B2B start-up  from Mr. Cuban on the basis of what was essentially a cold call.

Procurify’s goal is simple, make all the procurement and supplier-buyer communication powers currently enjoyed by large enterprises available to small and medium sized business.

“The core of it is that enterprise companies have many solutions available in ERP, enterprise resource planning software,” Mann told VentureBeat. “But it takes major resources that small to medium-sized businesses can’t afford.”

By moving those ERP resources to the cloud, Procurify seeks to solve the expense issues involved implementing electronic and integrated ERP functions that plague large firms that manage them in house by installing a $15 per month solution that allows small business to track and automate processes.  These are functions are often currently handled through a chaotic mixture of paper, email and the internal mental workings of whomever is in-charge of the SMB’s ERP functions that day.

Procurify is a product of GrowLab’s accelerator bootcamp, but even before officially graduating, the fledgling start-up managed to draw the attention of the very high profile Mark Cuban through a well timed email.

Mann cold emailed Cuban looking for an investment and kept up a one-man war of attrition on the investor’s inbox until Cuban got back to him.  A few meetings later,

“In his initial reply to our e-mail, Mr. Cuban said he would revisit our company in six months, citing how busy he was. Not to be dissuaded, we e-mailed him again the following month to let him know about the traction Procurify was gaining,” Mann wrote in a released statement. “This time he replied that he wanted to get a closer look at the company. He wasn’t interested in Procurify strictly from an investment perspective, he also recognized the value it could provide by improving the spend management at his existing businesses. A demo of Procurify was set up for his team and we began e-mailing questions back and forth.”

After months of negotiation, a deal was hammered out that gave Cuban a seat on Procurify’s board.  Mr. Cuban will sit on Procurify’s board of advisers and his investment will lead a $500,000 seed round to help build the company and move it forward.

“This investment gives us the opportunity to expand both the web and mobile platforms and bring Procurify to new heights,” said Eugene Dong, co-founder and CTO of Procurify. Ankur Jain, investor at Nexus Venture Partners said: “Businesses today are looking for simplicity without compromising agility. Procurify takes a fresh look at procurement and makes it very simple.”

On his site, Mark Cuban commented on the investment, noting “in today’s world of technology we should no longer be using outdated paper processes to accomplish tasks such as requisitions, reports, approvals, and purchase orders. In comes Procurify, a fully featured cloud based procurement and spend management solution. The focus of Procurify’s core value is providing a great user experience, while achieving significant time savings and the clear visibility of your company’s spending.”

 

 

 

 

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