Procoto, a tech startup that recently relocated to St. Petersburg, has secured new funding from local investors and through a Silicon Valley program.
Procoto, which focuses on procurement automation processes that can be easily accessible for smaller companies, raised $750,000 in a pre-seed round from TampaBay.Ventures, which solely funds tech companies, and the Silicon Valley-based Y Combinator program,along with local angel investors.
“Our goal isn’t to become a tech company based in St. Pete – we want to be known as a St. Pete tech company first and foremost and raise funds locally,” co-founder Michael Otis said. “The success in raising this round goes back to our procurement software product. We are doing what HubSpot did for the CRM [Contact Relationship Management] space.”
He cited how Massachusetts-based HubSpot, a sales and service platform known for its easy-to-navigate layout for users, has surpassed the $1 billion mark in annual recurring revenue and is regarded as one of Salesforce’s biggest competitors.
TampaBay.Ventures, founded in 2021 with an initial $20 million seed fund committed to investing in Tampa Bay-based tech companies, announced last year it was going to be making its first-ever investment, which would be with Procoto.
Additionally, Procoto received $125,000 from the Silicon Valley program Y Combinator, a prominent seed money startup accelerator that launched in 2005. Procoto was a graduate of the program, which has been used as a stepping stone to help launch more than 2,000 companies including Airbnb, DoorDash, Instacart, Dropbox, Twitch and Reddit.
Procoto is the first Y Combinator graduate that’s located in Tampa Bay.
The new funding comes as Procoto has revamped its website and adapted its marketing technique to better introduce companies to its product.
“We have built a new version of the product. Instead of cold calling customers and having clients sign large contracts as many big enterprise platforms do, we want to have a clean engaging approach and make it much more affordable,” Otis said.
Procoto is launching a free year-long software trial for users based in Tampa or St. Petersburg. Procoto will also roll out an initial 60-day trial for non-Tampa Bay customers.
During the trial process, it will allow users to become familiar with the software while Procoto can also collect feedback from customers.
“Small and mid-size businesses face the same challenges large enterprises do, but they don’t have the bandwidth or infrastructure to tackle them,” Otis said. “Our newest version covers contract automation, outreach to and from vendors, and bids, which it can analyze. The goal is to remove as much of the manual labor work that goes into sourcing so that the customer can focus on engaging with vendors. That was our foundation in building this automation process – companies have been spending time and costs on expensive processes that are not improving their bottom line or vendor relationships.”
Following the closing of the pre-seed round, the three-person team at Procoto hopes to add its headcount and bring in additional funding.
Otis said the company may raise a seed round followed by a potential Series A round that would occur by mid-2024.
Procoto is currently seeking a backend engineer and will be seeking to fill other positions in the office and marketing side.