Pricing intelligence firm Lytica’s bid to “think bigger” as it pushes into international markets is getting a boost thanks to millions of dollars in new venture capital and government funding.
The Kanata-based company announced Wednesday that it’s closed a $1.9-million investment round led by York IE, an early stage VC firm headquartered in Manchester, N.H.
The fresh injection of capital follows recent funding from the Federal Economic Development Agency for Southern Ontario and the National Research Council’s Industrial Research Assistance Program, pushing the company’s total to more than $3.8 million.
The firm’s revenues are on track to double this year compared with 2020 as the pandemic has wreaked havoc with global supply chains and fuelled rising demand for its AI-driven comparison-pricing software.
“There is not a company in the world that’s not looking for more insights and intelligence into procurement,” says Joe Raczka, co-founder and managing partner of York IE. “It’s amazing to think how big the market is.”
Launched 16 years ago, Lytica helps some of the world’s largest manufacturers of electronic devices such as computers and smartphones get better deals when they buy the thousands of components that go into those products.
Nearly 100 companies now subscribe to its software, which uses algorithms to compare prices and alert clients when they’re paying more than the going market rate for items such as resistors and capacitors.
“There’s tons of little bits and pieces that (manufacturers) need to build whatever it is they’re building, and every year literally billions of dollars are lost because the supply chain is so completely intransparent,” says CEO Martin Sendyk, who served as chief product officer at Ottawa’s Assent Compliance before joining Lytica.
Although Lytica says it won’t identify its customers for competitive reasons, the company says it sells its SupplyLens platform to more than 20 per cent of the electronics manufacturers on the Fortune 500 list.
Raczka says the vast majority of the firm’s market potential remains untapped.
“It’s really an ‘arms race’ on having this data, and Lytica’s got it,” he says. “They need to think bigger. This isn’t just a Canadian or U.S. issue. This is global. It’s time for them to think on a global scale.”
York’s founders were already well-acquainted with Sendyk before investing in Lytica. Co-founder and CEO Kyle York, who is joining the Kanata firm’s board of directors, previously served on Assent Compliance’s board during Sendyk’s tenure there and had kept a close eye on him in his new role.
“Clearly, we knew he was on to something,” Raczka says.
Lytica’s has 30 employees, up from 20 a year ago. Sendyk expects to add an additional 20 or so people over the next year.
The tech exec says he’ll be leaning on York’s scaleup expertise as Lytica stakes out new market turf.
“He’s got a lot of great knowledge on the go-to-market and the engineering side,” the CEO says, adding York’s investment has set the stage for what he hopes to be a “much larger” financing round in 2022. “It’s certainly not just money that they bring.”
Lytica is also investing heavily in software development. The company is honing its AI to steer customers toward a more targeted group of suppliers, a move it hopes will save clients time and money by making the procurement process more efficient.
“Lytica’s biggest issue right now is that most people don’t know that we exist,” Sendyk says. “We’ve got tremendous value – we just need more people to know that it’s available.”