Why we invested in HICX
By Vaibhav Nalwaya, Managing Partner at Wavecrest Growth Partners
In September this year, Wavecrest invested in London-based supplier experience platform, HICX. Now that a few weeks have passed and we’ve gotten to know the HICX team even better, I thought I’d share some comments on why we invested; why we believe procure-tech is an exciting space and why supplier experience in particular has the potential to be a transformational movement.
As a firm, we’ve been interested in procure-tech for some time. Many organizations have spent the past two decades digitally transforming their customer-facing activity but, there’s still an enormous opportunity to digitalize the back office, and within that, procurement.
Characterised by a tech stack that’s dominated by legacy ERP and worthy but slow-moving P2P suites, procurement is now attracting tech innovation. Dozens, if not hundreds of processes and decision-points are crying-out for automation and improved data. None more so than those which relate to suppliers. This is hardly surprising given that spend with suppliers accounts for somewhere between 30% and 50% of the total spend of a typical manufacturing company.
When we first came across HICX, we liked that it was growing in a procure-tech whitespace. This bootstrapped founder-led company was becoming dominant in its niche, and it had the right revenue and growth profile for us. Suffice to say, HICX was firmly on our radar.
In early 2020, we contacted the co-founder and CEO, Costas Xyloyiannis, to learn more. What particularly caught our attention about the software is that it complements large procure-to-pay venders. It doesn’t try to compete in this space. Rather, it enables companies to manage their business relationship with suppliers in higher-order use cases.
It also solves supplier onboarding, a particularly accurate pain point in the industry. This is just one of many ways in which HICX is supporting large enterprises to improve how they work with suppliers. The leadership team believes that organisations which can view suppliers as partners, create the conditions to ensure quality data. In procurement circles, this mindset is starting to become known as Supplier Experience Management and the concept is gaining popularity.
It was clear to us that HICX had a strong vision. We were very keen to see how they executed on it, and we wanted to observe how the market matured. And so we kept an eye on the company and how it was progressing.
Then Covid-19 hit. Supply chain disruptions were everywhere. Supplier relationships were in the spotlight and corporations were realising that they didn’t understand the risk of having thousands of suppliers providing multiple items from all around the world. The pain of not having visible supplier activity during supply chain disruptions made HICX’s software especially pertinent.
The company remained in our sights and when the time was right, we made an offer. We were delighted when the leadership team accepted, and we set out to get the transaction done. In early September this year, we were able to close an investment of $22 million.
We are very pleased to be working in partnership with this growing company. It’s great to see the traction which its Supplier Experience movement is getting in the market. We’re really impressed to see companies like Unilever, Mars and Mondelez using HICX and are amazed at how well the company is able to handle all the complexity of these businesses and still implement in a matter of months.
Looking forward the capital will be used to help HICX raise brand awareness and become more discoverable. It will also be used to further develop the product, service and speed time to value in order to serve customers in the best way possible. We are very excited about the journey ahead with HICX and the prospect of what we can achieve together.