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The profitable startup just raised $3.1M to advance its spend-monitoring AI bot
If you regularly subscribe to services on your smartphone, then you most likely found Trim (acquired by OneMain) or Rocket Money (f.k.a. Truebill) quite useful. Both apps help consumers save tons of money by monitoring and canceling subscriptions. Well, there’s now a similar platform for businesses – and it’s totally free! At least for now.
Called Sparx, the AI-powered platform just celebrated raising $3.1 million in its seed round of funding. Investors were Columbus-based tech VC Drive Capital, SaaS investor Thrive Capital in NYC, Human Capital in San Francisco, and Wicklow Capital in Chicago.
NYC-based Sparx was created by serial entrepreneurs Nicholas Fotopoulos and Ricky Pati to help startups save money. The team is focused on the development of various automated tools aimed at reducing hidden and unnecessary fees across SaaS, cloud, and insurance. The new capital will help Sparx scale operations and boost sales and marketing, according to a TechCrunch post.
In a blog post, Fotopoulos said you only had to do three things to cut that overspend: monitor subscriptions and get better deals before contract renewal; get in at the right time for better rates; and negotiate out unwanted parts of a product you’re signing up for.
At Sparx, the team was able to automate this process, cutting its customers’ expenses by 16.3% – and it’s not charging for the service. But the company claims it can save businesses up to 60% with its FinOps intelligence platform.
Fotopoulos described how Sparx saves the day with trade credit insurance (TCI). The startup has partnered with insurance carriers to offer its users A/R protection from broken deals and failed businesses.
“We’ve helped negotiate and purchase protection that guarantees payout of 95% of a customer’s A/R that cannot pay. By protecting A/R, TCI also lowers interest rates AND increases advance rates on A/R financing,” Fotopoulos wrote.
Sparx’ website states: “Elevate your FinOps strategy with unmatched savings, refreshing transparency, and intelligent business decisions.” The company promises savings on autopilot, reduced business risk with discounted insurance, and a 360-degree view of your stack to stay informed on renewals and purchases.
Further, with Sparx, businesses using Google Workspace, Microsoft Azure, or Okta SSO can get SaaS usage tracking at employee and app levels, identify shadow IT, and cut down software sprawl by identifying unused SaaS licenses. The website describes a case when Sparx was able to save an unnamed Series B startup $33,000 with its license management software.
“SaaS licenses can be a major source of cost for businesses of all sizes,” said Sparx CEO and co-founder Pati in an earlier statement. “In fact, according to a recent study by G2, the average business wastes $3.6 million per year on unused SaaS licenses. The only solutions to monitor usage cost hundreds of thousands of dollars. Combatting SaaS sprawl with another six-figure license puzzled me when I was an operator at Exai Bio and Gauss Surgical, so we flipped this model on its head.”
The beta version of Sparx launched just a half-year back, but the startup already reached profitability. According to Pati, as cited by TechCrunch, Sparx is close to making seven figures of annual recurring revenue. The company’s website proclaims that more than 200 businesses, big and small, have already signed up for Sparx – these include BMW, Zillow, Bill.com, and Invisalign.
“We believe in the resilience of the American enterprise through these trying economic times but we know a lack of tools to combat overspend may exacerbate existing issues,” Pati said.
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