This article previously appeared on Crains Cleveland on October 4, 2015.
CEO Jack Mulloy admits that he's probably been a little too quiet about the company, which has convinced several huge organizations to buy software designed to turn the corporate purchasing process into what he describes as an “Amazon-like” experience.
Now, however, BuyerQuest is starting to make some noise. For instance, it's actually putting out news releases containing announcements like this one: The company just received a $7 million investment from The Argentum Group of New York and First Analysis of Chicago.
The company plans to hire 50 to 70 more people over the next 12 months. And though only half of the company's existing employees are based in Northeast Ohio, the company's “goal is to hire locally as much as we possibly can,” Mulloy added, noting that BuyerQuest also is applying for economic development incentives from the state of Ohio.
The company's hiring goals are pretty aggressive — but are they feasible? Well, BuyerQuest has been doubling in size each year, in terms of revenue and employees, Mulloy said. And now it has more cash in the bank. Since 2010, the company had previously raised a total of $5 million from its founders and their friends and family.
“We're looking to run a lot harder now,” he said.
BuyerQuest has a reason to run hard. The company is small compared to the two Silicon Valley software companies that dominate the business-to-business purchasing industry. A $7 million investment might seem like a lot until you compare it to the $170 million Coupa Software has raised over the years. Or the $4.3 billion that SAP spent to buy Ariba in 2012.
This isn't to say that BuyerQuest can't compete with them. The company only has a few dozen customers, but many of them are massive. The list includes McDonald's, Disney, Caterpillar, Kimberly-Clark, Stanford University and Saudi Aramco — the oil company owned by Saudi Arabia's federal government.
And in many cases BuyerQuest has global contracts. The $7 million will help the company support those customers in other countries and win more international clients.
Being a little bit bigger might also help the company address what Mulloy says is its biggest challenge: Getting companies to agree to a meeting in the first place.
He mentioned a common phrase in the information technology world: No one ever got fired for buying IBM.
That doesn't apply to his company.
“You get fired if you buy BuyerQuest and it doesn't work,” he said.
Dan Raynor, cofounder of The Argentum Group, isn't too worried.
He has spoken with several of BuyerQuest's largest customers, and they're happy. Why? For one, the many employees who make purchasing decisions at those companies actually use the software. According to Mulloy, it's designed to have the visual appeal and ease of use people expect from online retail websites, as well as features that help companies control what they buy and who they buy it from.
Raynor closely follows software companies in corporate purchasing and supply chain management, and he said BuyerQuest “came out of nowhere.” He was surprised to find that they were already winning such large customers, despite having such well-capitalized competitors.
The money will help BuyerQuest ramp up sales, marketing and operations, he said.
Mulloy actually spent a few years at Ariba in the early 2000s before he and another “ex-Aribian,” Mark Kurtz, started Nitor Partners, a corporate purchasing consulting firm in Beachwood. There, he got a broader view of the industry. And he noticed that customers struggled to get their employees to actually use the software that was available at the time.
BuyerQuest was founded to solve that problem.
The company's growth is one reason why it moved out of what used to be warehouse space on Eastland Road and into its new office at 343 W. Bagley Road. They took 10,000 square feet on the third floor in August, and Mulloy plans to eventually exercise an option to take another 10,000 square feet on the fourth floor. The building is owned by Baldwin Wallace University.
But Mulloy, a graduate of St. Ignatius High School in Cleveland, has even bigger ambitions, according to his bio on the company website: “Jack plans to one day build a 60-story BuyerQuest Tower in downtown Cleveland.”