A Charlotte-area startup is changing the way large companies handle negotiations.
Pactum uses artificial intelligence to negotiate contracts for companies with at least $5 billion in annual revenue. It can negotiate terms, such as payments, contract lengths and liabilities. The startup communicates with vendors via a chat interface. Its system can also pull from historical data to better negotiate a deal.
Pactum, based in Mooresville, started big when it launched in 2019. It landed Walmart Inc. (NYSE: WMT) as its first client. The startup now works with 11 other enterprises, including global shipping company Maersk.
"There are a lot of things which a large enterprise can do for small vendors. It's just the bottleneck today is people and their time, but if a machine does it, we are much more open in discussing what other advantages are there for the vendor," said Martin Rand, CEO and co-founder.
Rand was product manager at Skype and commercial lead for Europe at Monsanto's The Climate Corp. He also co-founded VitalFields, an online management system acquired by Monsanto.
Rand's co-founders are Kaspar Korjus, chief product officer, and Kristjan Korjus, chief technology officer.
To date, Pactum has raised $15 million in capital, with ample support from Skype and DocuSign. Last year, it raised an $11 million round led by Atomico, a London-based venture capital firm. Project A, based in Germany, also contributed to the raise. Pactum closed a $3 million seed round in 2020.
The high-growth startup is tripling its headcount and increasing revenue by 10 times each year, Rand said. Pactum's largest deal to negotiate so far was at $40 million. Its highest value improvement in a single negotiation is $200,000, he said.
Kaspar Korjus, who ran Estonia's e-Residency government program for five years, said negotiations haven't traditionally been viewed as a task for computers. However, there are plenty of use cases when it comes to non-strategic deals. It's his job to map out those cases. Pactum works with clients across various industries, from logistics to banking to retailing. Smaller deals can still make a different in a company's bottom line, he said.
"We started with the largest, and then we are now coming down to all Fortune 500s," Korjus said. "(Negotiations) involve emotions and they involve meetings and they involve getting to know each other and to build trust. ... We hope that one day, in 10 years' time, (AI) helps everyone ... to reach a better deal."
Pactum's headquarters started out in California before moving to North Carolina. Rand said he has found this area to have a better business environment — it's easier to work with European customers, there's a major airport and housing costs are comparatively low. He said operations are almost fully remote, except for an engineering office in Estonia.
Moving ahead, Pactum would like to create virtual autonomous teams, with people focused on certain industries, Rand said. That will help promote more use cases. The startup is also planning to raise more capital in the near future.
