Recently we announced our strategic investment in supplier.io, the leading SaaS provider of supplier diversity management. This adds to a long list of Norwest’s Growth Equity investments into social impact-focused businesses. The company has profitably sustained 40%+ annual growth rates, and we are very excited to help them build upon that momentum.
Many of us are familiar with large company mandates and incentives to work with diverse suppliers. The business world’s focus on this is only increasing. Supplier diversity initiatives serve an important mission to enhance inclusion within a company but also to drive measurable financial and economic benefits. Given the rising tide of DEI awareness and calls to action, these initiatives have become more critical than ever. For example, a study announced by The Hackett Group this year predicted that, by 2025, companies expect a more than 50% increase in their diversity spend goals.
Quantifying your existing spend across diverse suppliers, or finding suitable new suppliers to work with, can be very challenging without the right tools. Historically, this has been a very manual process that adds substantial risk to a company’s supply chain. supplier.io, however, developed and delivered an innovative SaaS-based model that helps supply chain and diversity leaders manage their programs much more efficiently and accurately.
Having spent around a decade in the supplier management space via our investment in Avetta, we first started hearing about supplier.io via proactive endorsements from spend/procurement industry participants. Given Norwest’s focus on making investments with a social impact, supplier.io’s platform and mission immediately resonated with us. The company was already doing well and was very profitable. Although they didn’t need capital, we were able to align with founder and CEO Neeraj Shah around how additional resources from the Norwest platform might help maximize the potential of supplier.io.
In particular, two key areas emerged where Norwest could bring substantial value to the company: bringing expertise to scaling and maximizing social impact.
Norwest’s Growth Equity business is focused on partnering with founder/family under-capitalized businesses at a similar stage to supplier.io. Neeraj and team had already done an excellent job of building out a market-leading product and platform. However, it was becoming increasingly challenging to keep up with the overwhelming levels of new customer demand. We are excited to bring our experience and network of executives to help the company grow across a number of vectors. Initial initiatives identified include expanding the commercial organization (to meet surging market demand), amplifying supplier.io’s brand and positioning, recruiting talent for the next leg of the journey, and strengthening strategic partnerships within the industry. In each of these areas, we are supported by strong senior operating executives (e.g., David Garcia, Lisa Ames) or in-house teams (talent, BD) dedicated to driving value with our companies at this stage. We’ve been able to successfully help the likes of Cority, Avetta, Galvanize, and others scale from similar size to $100M+ and are excited to help supplier.io in the same manner.
Measuring Social Impact
Proclaiming a product’s social impact is one thing, but measuring it is much tougher. As part of our partnership with supplier.io, we will establish a framework to measure its social impact. We described this process in a recent blog post titled, “Measuring Social Impact in Your Software Business.” We believe that social impact measurement as a core KPI supports a continuous flywheel of recruiting, culture, product development, customer success, and sales. Furthermore, we believe that the flywheel’s reinforcement mechanism with social impact measurement as a central pillar ultimately creates a stronger business.
We understand that founders of successful businesses have many investment partners to choose from in today’s market. Norwest brings to the table the proven experience helping many companies that are blending financial return and social impact to grow. We are glad that our founder-focused, value-additive, social impact-driven approach resonated with Neeraj and couldn’t be more excited to partner with him and the entire supplier.io team!