Deal Download: A Conversation with Warda Shaheen

1. How did this deal originate? Can you tell us about the first steps on the road to this investment?

In the spring of 2021, our team began conducting a deep dive on the supply chain software market. We quickly identified Fairmarkit as the most attractive opportunity within the space given its clear leadership in tail spend management. After connecting with management, the OMERS Growth Equity software team met with Tarek Alaruri (COO/Co-founder) at SaaStr in San Francisco in the summer of 2021 to discuss a potential partnership.

2. What makes this sector an interesting place for investment today? What are the immediate opportunities for the company?

Procurement is one of the largest markets globally and is ripe for automation. Existing solutions have not focused on tail spend – commonly defined as the money a company spends on purchases that account for roughly 80% of total transactions and make up about 20% of the company's spend by volume. These purchases are often too small to go through procurement and are not frequent enough to be included in cataloged systems.  For context, Fairmarkit is an AI-enabled procurement platform built for managing tail spend more efficiently.  Fairmarkit’s marketplace gathers and aggregates customer spend data, provides vendor recommendations / reporting capabilities, and automates the source-to-award process. This frees up procurement team time to focus on higher value work by enabling the automation of low-spend procurement activities and generating 10%+ cost savings leading to a significant customer ROI. This sector and Fairmarkit more broadly align with OMERS Growth Equity’s broader thesis that fundamentally, companies will need to do more with less people as population growth matures. We view tail spend management as a historically underserved part of the procurement process that has yet to be digitized and automated given the complexity of the problem.

3. What sets this company apart from its competitors?

Fairmarkit is currently the only software solution of significant scale that is targeting the tail spend procurement market. We believe that given its strong technology built on a highly-scalable native SaaS platform, with a best-in-class consumer grade user interface, and a large network of global suppliers onboarded, Fairmarkit is miles ahead of their nearest competitor. Through our diligence speaking with multiple customers and industry experts we confirmed that Fairmarkit truly is the future of procurement.

4. OMERS invests in companies with strong management teams. What struck you about the Fairmarkit team?

When we first met with Kevin Frechette (CEO/Co-founder) and Tarek (COO/Co-founder) we were very impressed by their deep industry knowledge, passion, and clear strategy. Despite being first time entrepreneurs, they have been able to build a truly incredible platform. Fairmarkit has gained the backing of many blue-chip investors and customers and has a deep bench of talented executives and board members. Tarek and Kevin’s hustle and humility are apparent when first meeting them. Building Fairmarkit from the ground up has been a remarkable undertaking and they are just getting started!

5. What excites you about the future of this company?

Fairmarkit fits very clearly into every aspect that our team looks for in a potential portfolio company. A best-in-class management team, a traditionally underserved, large, and growing market, a blue-chip customer base, strong unit economics/customer ROI, combined with a highly scalable platform. We believe the future is incredibly bright for Fairmarkit and we are excited to support them as a value-additive partner as they scale.