Building a construction procurement company
by Sharon Fisher
Some companies talk about being bi-coastal. Team Procure is bi-continental.
“My co-founder originally founded it in Turkey in 2016,” said Joe Wolin, CEO of the Boise-based company. “The person who founded the company used to work for me as an intern at a previous company. I was completely blown away by what he was doing.”
Forming the company
Wolin and his co-founder reformed the company in the United States in 2021 and put its resources under its U.S. headquarters to better approach the U.S. market – leveraging the experience from the Turkish business partner, he said.
An Idaho native, Wolin graduated from the University of Idaho and worked for Micron for a number of years before starting Aspen Labs, a web electrical engineering startup focused on semiconductors. “After I worked on that company, I moved to Hawaii for 11 years,” which is when he met his co-founder. “He was one of our first users. I connected with him on Skype and we hit it off right away. We stayed in touch, and now we’re running a business together.”
Joe Wolin, co-founder of Team Procure. Image courtesy Team Procure.
Wolin moved back to Idaho from Hawaii to be more accessible to the business. “Hawaii is a remote place,” he said. “Time zones are very difficult in Hawaii and things don’t overlap.”
In Team Procure’s headquarters in the Banner Bank building are Wolin, two salespeople, and some supporting resources, while the Istanbul office houses 30 employees, including most of the development team. “It’s where our brain trust is, and the knowledge base on procurement,” he said. “There are outstanding developers for competitive rates.”
Getting started
As the name implies, Team Procure is procurement software, and it got its start in construction. It began working with a flagship customer that wasn’t happy with the procurement software available in the market, and tried to develop its own solution in-house. “They spend three years trying to build it,” Wolin said.
Meanwhile, Team Procure was working to identify smaller customers interested in running auction requests for quotes (RFQs), and developing sourcing and auction tools. The large construction company liked the way Team Procure set up its auction, and suggested partnering to build a procurement platform to fill the market needs it felt was lacking.
“We built a super-sophisticated system with the domain knowledge they had,” Wolin said. Moreover, the company didn’t mind Team Procure turning it into a product and even owning the intellectual property. “We were able to use that technology and keep it in-house and roll it out,” he said. “We got a lot of domain knowledge we didn’t have the capability to come up with.”
What does procurement software do?
Procurement helps an organization manage its spending through approval workflows. “When you want to purchase something, it goes in the approval workflow,” Wolin said. “Purchase requests are routed through the organization and converted from a purchase request to a purchase order. We manage those purchase orders. Through those purchase orders, we help buyers manage their vendors or suppliers.”
It’s been a big issue, particularly in the last couple of years. “Supply chain is a hot topic with the global economy and its complexities,” Wolin said.
The software also helps track purchases through waybills, which note where the products are coming, whether they’ve been delivered to the warehouse, and tracking and managing the inventory of products being purchased and received, Wolin said.
It’s a complex process and the company is solving a lot of unique problems for its customers, Wolin said. “Procurement software is only as good as the sum total of their pieces and how they work together,” he said. “When sourcing from a large company, it’s all about the price and the efficiency of the process. There’s a few other players in this market, but the feedback we’ve gotten is their tools are expensive and hard to use. We’re competing in this space by adding a better-designed tool with sophisticated capabilities in it.”
For example, one of Team Procure’s customers is the 23rd-largest construction company in the world, and it’s using Team Procure software to run its entire procurement organization of more than $1 billion in purchase orders, managing more than 500 warehouses within the organization, Wolin said.
Software geared toward SMBs
Currently, Team Procure has two versions of its E-Auction product, one for enterprise companies and one geared toward small to medium businesses (SMBs). “It doesn’t have the same sophistication when it comes to sourcing,” Wolin explained. In both versions, the product invites multiple suppliers to bid on an RFQ, but the SMB version is more of an out-of-the-box solution, while the enterprise version has more configuration options for a customer’s specific needs.
Team Procure’s software helps companies manage over a billion dollars of purchase orders. Image courtesy Team Procure.
“The enterprise product has very sophisticated capabilities,” Wolin said. “They get an entire instance of the product on their own instances of servers that’s tied in with their enterprise resource planning system.”
For example, one customer, Milwaukee Tools, has Canadian offices with trucks that visit customer sites to demonstrate tools. “They were able to use our enterprise platform to create an internal point-of-sale system and inventory management for the tool trucks,” Wolin said.
The SMB product also has integrated warehousing. “A lot of times those are disparate systems,” Wolin said. “There’s a nice warehouse tool, or procurement, but they’re not integrated.” The software also includes bar coding that lets customers check products in and out of the warehouse, he said.
Team Procure’s software runs on the Amazon Web Services cloud and is licensed as a service, and its customers typically have annual or monthly contracts priced on the basis of the number of people using the product. “We provide support and service,” Wolin said. The company doesn’t charge vendors or suppliers, and doesn’t take a percentage of procurement sales.
Now, Team Procure is meeting with customers to find out what the holes are in current products in the market. “As we’re growing our product, we’re converging on the needs of the customer and what competing products can do,” Wolin said.
Financing
Team Procure has had some small seed rounds over the past few years – “small, initial investments to get us going,” Wolin said – and recently partnered with Capital Eleven on a strategic seed round. “We have $500,000 that was invested into the company, with another $500,000 with targets we plan to hit,” he said.
Next year, Wolin said he is likely to look for another investment, when the timing is right. “The goal would be to be on a pretty good growth trajectory,” he said, noting that the company grew 71% in the previous quarter and has “pretty realistic targets” for the end of the year. “Our goal is Series A, hopefully next year,” he said, though he didn’t have an amount in mind.
Wolin said he doesn’t yet have an exit strategy. “Our focus is on creating an amazing product,” he said. “Once the product is where we want it to be, our focus is on growing the company and the product and making sure it’s delivering on all fronts.”
Sharon Fisher is a digital nomad who writes about entrepreneurship.