Fairmarkit is an autonomous sourcing platform that is transforming how enterprise procurement teams manage their tail spending and beyond. To learn more about the company, Pulse 2.0 interviewed Fairmarkit co-founder and CEO Kevin Frechette.
Kevin Frechette’s Background
Kevin Frechette graduated from UMass Amherst and joined a local tech giant selling big data storage solutions.
“I quickly realized that I could sell the exact same solution to multiple companies for massively different prices – and it was all based on negotiation. My sales incentives and targets were misaligned with customers’ pricing information, and it stuck with me,” said Frechette. “I thought about how in our personal lives, it’s easy to see how much we pay for goods and services, but in the business world, it’s nearly impossible. That realization sparked the initial idea for Fairmarkit. That idea came to life when I met Tarek Alaruri, who would become my Co-Founder and Fairmarkit’s COO along with my third Co-Founder and CTO, Victor Kushch.”
Formation Of Fairmarkit
How did the idea for Fairmarkit come together? Frechette started Fairmarkit at a time when large enterprises were starting to better understand spend due to the increased frequency of multi-million dollar SaaS contracts. And the initial idea was to create a bell curve so people could see the difference between a good, fair, and bad pricing. To get the idea out there, the team was making 200 daily cold calls to large enterprises.
“Our team quickly noticed that the limited number of procurement people meant most only had time to focus on big-ticket purchases. This allowed what we call tail spend to fly under the radar. What doesn’t qualify as ‘big ticket’ enough for procurement is often a HUGE number, often hundreds of thousands of dollars,” Frechette pointed out. “On average, about 80% of a company’s transactions in a year is made up of smaller to medium-sized purchases, and that cumulative tail spend accounts for $1.8 trillion across the globe! We found our purpose. Tarek, Victor, and I decided to create a platform that would automate sourcing and integrate with existing systems so those lean procurement teams could find significant savings with light work and become company heroes. One of our first customers signed a $120,000 contract with us after seeing the ROI, and that was just the beginning.”
Challenges Faced Building The Company
What are some of the challenges Frechette faced in building the company?
Frechette told me that whenever you create a new category, especially one tied to such big dollars, prospective customers can be a bit leery of our capabilities.
“We faced an uphill battle to prove ourselves. But every economic trend we’re seeing – shrinking budgets, layoffs, etc. – is wind at our backs as companies at all stages are very spend sensitive,” Frechette explained.
Core Products
What are Fairmarkit’s core products and features?
Fairmarkit utilizes an autonomous sourcing platform to replace the outdated manual procurement systems that many companies currently employ. And the platform uses AI to create completely self-driven and digitized sourcing. This intelligence engine gets smarter as more sourcing events are run, which leads to even more personalized recommendations.
Evolution Of Fairmarkit’s Technology
How has Fairmarkit’s technology evolved since launching?
Since its launch, Fairmarkit’s platform is only getting better. And as the data set and training model gets bigger, the system gets smarter, providing even more precise results.
Most Significant Milestones
What have been some of Fairmarkit’s most significant milestones?
“Having our customers talk about and to us as we all work for the same company is a major achievement. It feels like we are on a journey alongside our customers, and we are incredibly proud to have established that kind of partnership with them,” Frechette replied.
Customer Success Stories
When I asked Frechette about specific customer success stories, he shared a couple of testimonials:
1.) Brian Johnson of AMPCO said that they were able to optimize and even reduce the buying team and repurpose some of those individuals in areas that were more needed.
2.) Al Moss of PCI said that Fairmarkit was quite a low risk from a cost perspective and it gave them the opportunity to maximize labor so that they could go likely years before having to add additional people to buy in the MRO space regardless of how large their sites actually expand.
Growth
Since launching, Fairmarkit has grown over 100% year-over-year and currently serves enterprises such as BP, British Telecom, Cabot Corporation, Emirates Flight Catering, Vattenfall, Refinitiv, and Snowflake. And customers have experienced 11.5% cost savings on purchases and a 60%+ reduction in manual efforts.
Total Addressable Market
What is the total addressable market (TAM) size that Fairmarkit is pursuing?
The Global Tail Spend Management Solutions Market was valued at $1.5 billion in the year 2021 and it is forecast to reach a value of $9.1 billion by the year 2028 according to Vantage Market Research.
Differentiation From The Competition
What differentiates Fairmarkit from its competition?
“Processes in the procurement world are outdated, cumbersome, and inefficient. The Fairmarkit process is simpler and easier for buyers to use because it streamlines all sourcing through AI and data analytics-based recommendations,” Frechette answered. “As more sourcing inquiries are run, the platform makes further intelligent recommendations, allowing companies to make more informed decisions about their tail spend in the future.”
Future Company Goals
What are some of Fairmarkit’s future company goals?
“Companies that diversify their supply chains are more agile and able to respond to changing market conditions and are able to capture more market share. Our goal is to help unearth process improvements that will help companies drive impactful results and have a far-reaching effect on supplier diversity,” Frechette concluded.
