Supply chain artificial intelligence provider LevaData will boost research into its market analysis tool and expand into new sectors after receiving $5 million in venture funding, the company said Tuesday.
Sunnyvale, Calif.-based LevaData landed the investment from Tola Capital, a Seattle-based firm that says it invests in companies that drive digital transformation through advancements in cloud, data, and mobile technology. The investment brings LevaData's total funds raised to about $7 million, following an earlier "angel" round, the company said.
Global enterprise companies such as Cisco and Bose use LevaData's platform to reduce their supply chain costs by applying artificial intelligence (AI) to improve their sourcing and procurement decisions, LevaData says. The firm's "Cognitive Sourcing Platform" continuously analyzes spend analytics across multiple bills of materials, commodity category trends, and community benchmarking data to create predictive insights and to identify risks and opportunities for cost savings, according to the company.
LevaData plans to use the additional capital to roll its solution out beyond the consumer electronics firms and original equipment manufacturers (OEMs) who have adopted it to date, and reach into additional sectors such as automotive, aerospace and defense, and medical devices, said Richard Barnett, LevaData's senior vice president of marketing and customer success, in an interview.
Artificial intelligence is also gaining acceptance for supply chain applications driven by firms like Aera Technology and ClearMetal Inc. Both firms have raised venture capital funding in recent months for technology they say can predict future trends, such as forecasting the flow of cargo containers or honing inventory levels to control costs.
LevaData's platform brings predictive cost inputs to corporations' procurement practices, an area of the supply chain that has lagged other sectors in harvesting the benefits of AI, such as machine learning and intelligence assistance, Barnett said. "Our customers have the same amount of spend impact as other sectors, but it's like they're trading on Wall Street one day a year with information that's three months old and trying to beat the high speed trading computers," said Barnett. "These guys are in the stone age; they have really gotten left behind."
Customers save money by using LevaData's tools to predict shortages or surpluses of goods, and then update their contracts before other buyers can react, Barnett said. "We're not just delivering better outcomes, but improving the responsiveness and agility of companies to react better than their competitors. By identifying supply constraints or bottlenecks, they can act six months ahead of big market shifts," he said.