It’s Lytica’s second major fundraising drive in the past 24 months, following a $13-million financing round led by Baltimore-based Resolve in 2022.
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An Ottawa software firm that says it saves some of the world’s biggest electronic companies millions of dollars a year in manufacturing costs has raised fresh capital to finance its ongoing expansion.
Lytica announced this week that Resolve Growth Partners has invested an additional $5 million in the local tech enterprise. It’s Lytica’s second major fundraising drive in the past 24 months, following a $13-million financing round led by Baltimore-based Resolve in 2022.
Founded 19 years ago, Lytica has been on a tear over the past half-decade, doubling its revenues year-over-year as more and more Fortune 500 companies adopt its technology.
“You can’t do that forever, but we’re still going pretty strong,” CEO Martin Sendyk told Techopia on Thursday. “And that’s the momentum we want to keep.”
Lytica’s subscription-based software platform, called SupplyLens Pro, uses artificial intelligence to compare prices of thousands of components that go into electronic devices such as computers and smartphones, helping manufacturers find the best deals and alerting them when they’re paying more than the going market rate for staples such as resistors and capacitors.
Sendyk explains that many of Lytica’s 100-plus customers – which include industry giants such as General Electric and Microsoft – spend more than $100 million a year on electronic components. The company estimates that the insights gleaned from its software shave about 10 per cent off an average customer’s annual shopping bill for such items.
“We like to say that we solve a billion-dollar electronic component supply-chain problem,” Sendyk said, adding his firm offers its clients a “very clear and strong value proposition.”
“Every year, billions of dollars are lost because nobody knows how much to pay for these chips and other electronic components,” he added. “Prices change all the time and they vary hugely. It’s probably the least transparent commodity market on the face of the Earth.”
Lytica’s secret sauce is its proprietary database that contains real-world pricing information on millions of items from tens of thousands of global electronics suppliers.
“It allows us to solve that billion-dollar problem,” Sendyk explained. “It’s really hard for anybody to compete with us because nobody else has this data.”
The 60-employee firm is using the latest funding to develop new features for SupplyLens Pro.
Sendyk said Lytica’s engineers are tapping into the power of AI to mine in-depth insights into customer spending that can save manufacturers even more money.
That could include analyzing bills of sale to find out if suppliers in certain geographic regions deliver better value to buyers than others, or which sales teams are negotiating the best deals.
“That extra step is pretty valuable, and we want to be able to deliver it to market quickly,” Sendyk said.
Resolve Growth Partners co-founder Chris Rhodes said Lytica’s “unique IP” and its proprietary database set it apart from its competitors.
“The growth that we’ve seen as a result of this is impressive and we’re excited to continue to support the team in the company’s next phase of growth,” Rhodes said in a statement.
In a 2022 interview with Techopia, Sendyk noted that Lytica’s potential customer pool keeps getting deeper by the day as more devices – including household items like fridges and thermostats – become connected to the “Internet of Things” and require wireless technology to function properly.
While he now concedes that economic headwinds have blunted Lytica’s momentum in recent months, he’s confident the slowdown will be short-lived.
“I think overall (companies) are just more cautious, and that’s understandable,” Sendyk explained. “It means longer sales cycles, more hoops to jump through, more checks and balances.
“The good news for Lytica is that we sell a product that literally helps you save millions of dollars. So even when things maybe go quite badly in the economy and companies start to pull the plug on various programs, we’re usually the last to get unplugged. And if we ever do, we get plugged back in pretty quickly when they figure out we’re here to help them save.”
