Penny Software, a B2B SaaS platform established in Saudi Arabia, is creating its own space in the market. The startup was founded in 2020 by Iyad Aldalooj, Majid Aldalooj, and Mohammed Ibrahim and it provides a procure-to-pay platform to help businesses digitize procurement and sourcing management. It offers a method that automates the entire procurement process from request to payment, allowing businesses to obtain full transparency into their spending operations and improve forecasts.
Penny introduced its own B2B marketplace that is integrated within the procurement software and available to users across Saudi Arabia.
Iyad Aldalooj, Co-Founder and CEO of Penny, stated: “[Procurement] is vastly happening in a fragmented manner, whether in different emails and Excel sheets. So if you are a procurement manager, and you are sending requests for quotations to multiple vendors, and those vendors call you, so instead of you taking every cost from every vendor putting them together during the comparison and analysis, the system does all of that for you.”
The startup first focused on SMEs to develop its proof of concept, but eventually realised that its minimal viable product (MVP) resonated better with medium and large scale businesses. The reasons for this are that the cost of SaaS adoption is too high for a small business, and Penny’s clients have more sophisticated and stringent procurement requirements.
Penny recently closed a $5 million Seed round, led by Outliers Ventures Capital, with participation from existing investors such as Shorooq Partners, Hambro Perks ORYX Fund, Wamda, and Class 5 Global, almost a year after raising a $1.5 million pre-Seed round. The purpose of this round, according to Aldalooj, is to accelerate product development and promote global expansion, with intentions to launch in the United Kingdom in 2022.
Penny wants to tap into the global market, which is valued at approximately $120 billion. Global procurement software earnings are predicted to reach $7.3 billion by the end of 2022, up from $6 billion last year, according to IDC. SAP Ariba, Jaggaer, and Coupa, the latter of which is a publicly traded enterprise with a worth of over $20 billion, are all part of the global procurement landscape.
Aldalooj shared: “The valuation of these software businesses is 30x revenues. It’s becoming a very hot, fast-growing industry. And we are seeing an influx of startups from all over the world coming to disrupt procurement.”
Penny’s main focus is creating a solution that is simple to use and scalable for customers in both domestic and international markets. According to Adalooj, there is still a global demand for a product like his.
The number of SaaS startups has soared in recent years, thanks to an influx of capital. Mena’s SaaS startups raised $176 million last year, demonstrating that the sector is maturing. Penny, on the other hand, believes that the market in MENA is not growing quickly enough to allow for proper and faster expansion.
“Our intention for Penny is to build a global product with a global brand. From day one, we are competing with all the global startups. We still don’t have an enterprise software ecosystem, and therefore we’re not competing with a lot of local startups from Saudi or Mena. However, this is changing.” Adalooj added.