Spend management platform Yokoy today announced that it raised $26 million in series A financing from Left Lane, with participation from prominent European investor Balderton Capital. The Zurich, Switzerland-based company says that it’ll use the new funding — which brings its total raised to $27.1 million — to expand across the U.S., Europe, and other regions around the world while enhancing the technologies underpinning its platform.
The spend management software industry is projected to be worth $3.97 billion by 2027, up from $1.08 billion in 2019, according to Verified Market Research. The Global Business Travel Association pegs the cost to companies of processing a single expense report at $58 each time, while processing a single invoice is estimated to cost between $12 and $32. Indeed, the biggest cost drivers when it comes to spend management are often errors, manual work, and transaction fees. Yokoy asserts that these costs can be cut by half if certain resource-intensive processes are automated.
Founded in Switzerland in 2019, Yokoy provides an AI-powered spend management suite for midsize and enterprise companies. Through a combination of machine learning, automation, and API integrations, the startup offers expense management, supplier invoice management, and corporate credit cards.
CEO Philippe Sahli, and chief technology officer Devis Lussi (who previously worked at CERN) met while working at Ernst & Young’s management consultancy, while chief customer officer Lars Mangelsdorf had been building software-as-a-service (SaaS) products at other startups. Meanwhile, CFO Thomas Inhelder — who’s held accounting roles at KPMG — came into contact with Sahli at a previous startup.
“With Yokoy, we’re building a highly intelligent, highly secure, and highly customizable global spend management platform that empowers our customers to take control of their vast corporate spending processes and fine-tune their workflows,” Lussi said in a statement. “We’re helping them to cut costs, save time and bring clarity to their global operations in a way that fits their ambitions. It’s this that we believe will see us becoming the leading spend management platform in the world.”
AI-powered spend management
With Yokoy’s platform, midsize to enterprise companies can configure and build their own process flows and integrate Yokoy with third-party tools. Lussi claims that the platform is “self-learning,” enabling Yokoy to monitor individual workflows and processes to make them more efficient and scalable over time.
For example, customers can import expense receipts and invoices by snapping pictures of them through Yokoy’s mobile app. The platform’s algorithms enhance the picture quality before extracting the words and numbers via optical character recognition, validating more than 300 data points in a single receipt or invoice. In the case of invoices, Yokoy can also recognize suppliers, match them with data from a company’s enterprise resource planning software, and fill any missing data into the scanned document. With the information it extracts from documents, Yokoy checks relevant policies, gauges the potential for fraud, and validates the data for outliers and rules violations.
Any scans that don’t pass Yokoy’s quality assurance benchmarks are set aside for manual review, while the rest are automatically exported to an accounting system.
“Yokoy is able to reconstruct [the] context [of documents] based on various features. Such features can be the relative position of a sequence of characters on the paper — top, bottom, left, right — or the presence of certain keywords. With the help of keywords (Yokoy’s list comprises more than 100,000 entries in many different languages), something can be found out about the type of an expense,” Sahli told VentureBeat via email. “Yokoy has described the relationships between these features within [AI] models. In the fraction of a second [that] it takes the software to digitize and analyze an expense receipt, several such models are processed. The models have been trained with millions of examples, and they are constantly being refined.”
Yokoy competes with Ramp and others in the spend management solutions segment. But in two years, the company has managed to attract 80,000 users across 400 customers including DPD Group, Stadler Rail, Russia’s Sberbank, the Swiss bank Swissquote. Part of the latest investment will be put toward growing the company’s headcount by the end of 2021, Sahli says.
“Spend management includes the processing of supplier invoices, travel expenses, corporate credit card expenses, and all such accounts payable categories. While the travel expenses have decreased during the pandemic, other categories — like online purchases over corporate credit cards — have increased during that time,” Sahli added. “The total spend volume processed over Yokoy per customer during the pandemic has actually increased. Yokoy is a true winner of the pandemic, but for a completely different reason: COVID-19 has truly accelerated the digitization and automation in companies and that’s what has pushed us, especially the new customers number.”
Yokoy employs about 100 people throughout its five offices. It expects to more than double that number to 250 by the end of 2022.
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