Contract management platform Terzo raised $16M in Series A funding led by Align Ventures with participation from TYH Ventures, Engage Ventures, Human Capital and other. The company is also welcoming world-known entrepreneurs as angel investors, including Ryan Breslow (Founder & Chairman of Bolt) and Daniel Saks (Co-founder & President of AppDirect).
“Terzo is tackling a $6 trillion problem that almost every organization faces. Most companies do not have an effective contract management system in place which leads to inefficiencies like overspend. Terzo has developed a much needed unique enterprise platform to empower the buy side. We chose to back Terzo from the start as they have the team, vision and product needed to completely change how companies manage their contracts and enterprise relationships.” said Neel Chary, Partner at Align Ventures.
Terzo is a contract intelligence software powered by a AI-as-a-Service model. Terzo extracts critical financial data trapped in contracts to help organizations optimize their spend and revenue across their supplier and customer relationships.
According to Terzo, McKinsey estimates that poor contract governance can cost organizations up to 9% of their total revenue — which equates to $1.4 trillion for the Fortune 500 alone and $6.4 trillion across all enterprise B2B companies.
The big problem, as identified by Terzo: today’s contract software is designed for legal teams. Finance and other business teams do not have visibility into contract commitments. Finance teams are blind when it comes to contract insights and it is costing them due to missed budgets and inaccurate forecasts.
In today’s world, finance teams rely on historical general ledger transactions to predict future spend while the majority of future spend is actually right in front of them and found inside their three and five-year contracts. Unfortunately, finance teams waste too much time forecasting with only 50% of the data. Leaders need to see both spend data and their contract commitments to forecast accurately and meet budget goals. Spend actuals and contract commitments — those are the two critical variables that Terzo brings together.
Terzo says it is filling a huge gap in legacy ERP systems like Oracle and SAP which don’t offer AI or automation around contract data. Terzo offers API integrations to cloud and on-premise data sources and sits on top of core enterprise applications as an additional layer of intelligence.
The most efficient method of pulling all this data is through AI. Since AI isn’t 100% accurate, maintaining human oversight during the implementation of these AI-a-as-Service models is crucial to ensuring quality. This is critical both for model training and the final output of the data. Terzo states that it has created a platform that combines data management, automation and AI, but also keeps people in the loop. According to the enterprize, the impact is that businesses save 50-60% of the hours typically spent on manual data processes.
Terzo says their platform is being used by a Fortune 50 retailer, Fortune 100 bank, and the largest financial transaction processor in the world. They have over $20B of contract value being managed across all customers and, with their funding, they plan to expand further into the Fortune 1000 as these companies need their technology most. Terzo also plans to expand their AI and machine learning capabilities to make their platform more automated and integrated.