Exclusive: Sagetap raises $6.8 million to build AI-powered marketplace for enterprise software

Sagetap, a startup that uses artificial intelligence to match enterprise software buyers and sellers, announced today that it has raised $6.8 million in seed funding. The company is building what it calls the first AI-driven marketplace for enterprise software procurement, aiming to solve pain points for both overwhelmed technology executives and unknown software vendors looking to fill their sales pipelines.

“What we’re doing with Sagetap is building the first AI-driven marketplace, matching buyers and sellers of enterprise software,” said Sahil Khanna, CEO and co-founder of Sagetap, in an exclusive interview with VentureBeat. “More so than procurement, I would describe this as discovery.”

Solving pain points for software buyers and sellers

The idea for Sagetap grew out of Khanna and his co-founder’s experiences working at earlier stage enterprise software companies. As much as 50% of those startups’ expenses went to sales and marketing, but the old-school tactics like cold emails and LinkedIn messages were yielding diminishing returns.

“This is bleeding-edge technology they’re building, but the way they’re doing sales hasn’t changed in decades,” Khanna said. “It felt inevitable that a marketplace like Uber and Airbnb for enterprise software was going to happen.”

On Sagetap’s platform, technology executives anonymously create profiles with details about their technology stack, cloud infrastructure, initiatives and success criteria. Sagetap’s AI-powered recommendation engine then matches them with vendors deemed most credible and relevant. The buyers and sellers meet in 30-minute introductory Zoom meetings hosted on Sagetap, with the buyer’s identity shielded.

“I can now without hesitation explore a lot of new innovative technologies constantly,” Khanna said of the platform’s approach. “But I’m not being sold to if I don’t want to be sold to.”

Vetting vendors and gaining early traction

Sagetap said it has a database of 14,000 software vendors backed by top venture capital firms. It vets vendors using a combination of publicly available information and “proprietary anonymized data” gleaned from interactions on its platform. To become active customers able to launch campaigns through Sagetap, vendors must pass an additional screening process.

On the other side of the marketplace, Sagetap said over 5,000 “verified technology executives” are using its platform, hailing from companies like Nvidia, JPMorgan and Airbnb. Some have told the startup that Sagetap has become their preferred way to meet new vendors.

“They no longer respond to cold email or their LinkedIn,” Khanna told VentureBeat. “They meet vendors via Sagetap. It’s their preferred medium.”

Consumerizing enterprise software procurement

To differentiate itself from established industry analyst firms like Gartner, Sagetap is pitching a more targeted service powered by AI and built around direct, anonymous interactions between buyers and sellers. The buyers “get a deep understanding of every unique buyer, their organization, environment, needs, pain points, and recommend products that actually can address those,”  Khanna said.

But Sagetap faces the challenge of building liquidity and reaching critical mass on both sides of its marketplace. To gain a foothold, it will need to convince buyers that its AI can surface worthwhile new vendors and persuade sellers that it can connect them with the right decision-makers to fill their pipelines.

The startup’s seed funding round was led by NFX, with participation from Uncorrelated Ventures, and Emergent Ventures. Notably, Sagetap said $1 million of the round came from its own customers, including executives from Oracle, Dell, and SecureFrame, a sign of confidence in its platform’s early traction.

If Sagetap’s vision plays out, it could further accelerate the consumerization of enterprise software buying, where individual developers and business units can quickly procure the tools they need. But it’s still early days. The enterprise has long proven resistant to change, and software procurement remains a complex beast still often mediated by analyst firms, requests for proposals, proofs of concept and vendor bakeoffs.

Sagetap will need to prove that an AI algorithm can reliably replace that process. But with $6.8 million in new funding, it at least has some runway to try to crack the code on modernizing software procurement for buyers and sellers alike.