As much as Martin Sendyk would love to credit his company’s success to nothing but an astute reading of impending market trends, he’s been around long enough to know that to get anywhere in business, it helps to have a bit of good fortune on your side too.
And the chief executive of software maker Lytica is more than happy to concede that Lady Luck has been smiling on the enterprise a lot lately.
“We’re in the right place at the right time,” Sendyk told Techopia this week after the Kanata-based firm announced its latest round of equity financing, a $13-million investment led by Baltimore’s Resolve Growth Partners.
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“We happen to have a solution that used to be very important and has now become extremely important.”
Indeed, 17 years after it was founded, Lytica is really having a moment.
The firm’s subscription software platform 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.
It’s a niche that Lytica – which has spent years compiling a proprietary database that contains real-world pricing information on millions of items from tens of thousands of suppliers – says only it can properly fill.
Deepening customer pool
More and more customers – not to mention investors – are taking notice. Lytica has raked in nearly $17 million in fresh funding in the past 12 months as it looks to capitalize on market conditions that appear tailor-made for its solution.
With supply chains in a constant state of disruption as the pandemic stretches on and inflation now raging, electronics buyers ranging from carmakers to appliance manufacturers are finding it harder than ever to source components at a reasonable price.
Meanwhile, 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.
“We literally save our customers millions and millions of dollars. A lot of (them) see us as kind of their secret weapon.”
“There’s hardly a product these days that doesn’t have electronics,” Sendyk noted. “There are hundreds of thousands of electronics manufacturers out there, and each of them is spending millions and millions of dollars – often $100 million or more per year – trying to get these electronic components, the little bits and pieces that they need to build their products. And it’s been a very tough year for a lot of these companies.”
Sendyk says Lytica is shedding light on the electronics component space, which he describes as the “least transparent commodity market on the face of the Earth.”
The Ottawa firm says its software typically shaves about 10 per cent off an average customer’s annual spending on electronic components. From Sendyk’s perspective, it doesn’t take a math whiz to understand what kind of impact that can have on a major manufacturer’s bottom line.
“We literally save our customers millions and millions of dollars,” he said. “A lot of our customers see us as kind of their secret weapon.”
While Lytica won’t name any of its clients for competitive reasons, Sendyk says it’s safe to say their logos are on products all of us see every day. The company now has “well north of 100 customers,” he said, adding that number is “growing quickly.”
Hiring spree
Lytica went on a hiring spree after landing nearly $4 million in venture capital a year ago, raising its headcount from 30 last August to about 50 today. Sendyk expects that number to rise to about 75 by late 2023 as Lytica’s revenues are “well on track” to double year-over-year.
Resolve Growth Partners co-founder Chris Rhodes says he’s been tracking Lytica’s progress for several years and believes it’s on the cusp of “breakout” status.
“I think we can build a really big business in this space,” said Rhodes, who will join Lytica’s board of directors as part of the agreement. “We’re really grateful to have the opportunity to partner with them.”
The former investment banker explained that Lytica has a leg up on competitors like global data services giant IHS Markit that rely on third-party, publicly available data for price comparisons.
“They’re the only vendor with a robust database of real-time pricing information,” he said, noting that Lytica has been compiling its data for more than 15 years. “It would be hard for any other competitor to replicate.”
Rhodes said his firm wants to help Lytica “strategically build a market-leading platform over a bunch of years.” Much of Resolve’s investment will go toward beefing up Lytica’s sales and marketing team as the firm seeks to aggressively expand into new verticals and geographic regions such as Europe and Asia.
While acknowledging that the newest member of Resolve’s portfolio is “well set up to win,” Rhodes said Lytica’s leaders can’t assume it will be in the pole position forever.
“If you don’t take advantage of a first-mover position, then sometimes the market can give way to other people,” he explained. “It’s the threat of new entrants that we worry about. The best way to compete against that is speed of execution.”
Sendyk, who spent four years as chief product officer at supply chain software powerhouse Assent before taking the helm at Lytica in 2020, said the company will have to “think differently” as it enters the next phase of its development.
“Taking a company to a certain point on the backs of heroism is one thing – redesigning it in a way that can scale is another,” he said. “It’s a never-ending transition.
“What got you from A to B isn’t going to get you from B to C. Lytica has to now take what it’s invented and transform that into a beautiful, scaleable thing. That’s a big change, and it shouldn’t be underestimated.”
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