February 23, 2022
Good morning, Retail Readers!
Situational awareness: Shares of Ralph Lauren rose 5% on Tuesday after I reported on LVMH holding exploratory talks about a potential deal for the U.S. fashion brand.
1 big thing: CoProcure raises $22M Series A
CoProcure, a marketplace where local and state governments can purchase goods and services, raised a $22 million Series A led by VC firm Forerunner, the company's co-founder and CEO Mariel Reed tells me.
- Leadout Capital and Neo, as well as angel investors Marco Zappacosta (founder of Thumbtack), Dan Lewis (founder of Convoy) and Katrina Lake (founder of Stitch Fix) also participated.
Why it matters: CoProcure is part of a new generation of startups that want to use technology to address ignored opportunities like selling to local and state governments while making the world a better place.
Although consumers have sophisticated apps that help them order everything from food delivery to car service, the way governments buy the things they need is still stuck in the 1990s, Reed says.
State of play: The startup claims that e-commerce sites do not exist for the 16 million public servants responsible for spending on everything from PPE to landscaping to school supplies.
Delivery can take between four and 24 months, she says.
Between the lines: The idea is to create an online destination that wrangles up all the government buyers out there into one place.
- That one-stop approach allows these government buyers to buy off one another’s contracts.
- This is called piggybacking or cooperative purchasing and theoretically saves these organizations time and money.
- The aim, according to Reed, is an e-commerce site allowing local and regional businesses to tap into a market that they either never thought of selling to or decided it wasn't profitable.
What's next: Proceeds will be used to market the service, which so far has largely grown through word of mouth, and to aggressively sign up more governments, Reed says.
Because the aim of CoProcure is to bring all government purchasers onto one platform, the service is being offered to them free.
By the numbers: More than $100 million worth of goods and services were sold to government entities in 2021 on the platform via about 40,000 vendors. One-quarter of these vendors qualify as minority-owned.
- The startup aims to more than triple that amount this year, Reed says.
- More than 300 local and state governments have signed up so far.
- The total universe is 50,000 buyers with some $2 trillion in annual spending — $200 billion of that spent via piggybacking, she says.