Kearney invests in tail spend management software firm Simfoni

15 June 2023 2 min. read

Kearney, a global management consulting firm, led an $8-million, Series A-2 investment round for Simfoni, a San Francisco-based provider of spend analytics, esourcing, and tail spend management solutions.

PeakSpan Capital, an existing investor in Simfoni, also participated in the round. The New York-based private equity firm previously led Simfoni’s $15-million Series A round.

The investment will advance the strategic partnership between Kearney and Simfoni and enable Kearney’s clients to benefit from a turnkey tail spend management solution with a pay-as-you-save pricing model.

Tail spend comprises the purchases that make up approximately 80% of total transactions, but only about 20% of spend by volume. Such purchases are too small to go through procurement and not frequent enough to be included in catalogued systems.

The area can be targeted for significant cost savings, with BCG estimating that effective digital technologies for tail spend management could unlock between 5% to 10% in annual expenditures savings, on average.

Kearney invests in tail spend management software firm Simfoni

Simfoni’s spend management platform provides AI-enabled spend analytics, sourcing, optimization, spend automation, and payment consolidation to help clients identify savings opportunities and optimize sourcing and procurement processes.

The firm has more than 260 employees across offices in San Francisco, Chicago, London, Dubai, and Melbourne.

“Kearney is thrilled to partner with Simfoni to provide our clients with access to the most comprehensive digital procurement solutions in the market,” said Alex Liu, managing partner and chairman, Kearney. “We are confident our clients will benefit from improved visibility and increased efficiencies as they continue to regenerate their business models and performance.”

The combined Kearney-Simfoni offering will provide clients with a human-centric user experience that integrates with existing technologies; a pay-as-you-save model with fees tied to usage and actual savings; payment consolidation and vendor management to reduce the burden of management a high volume of tail vendors; and the ability to prioritize ESG-aligned suppliers and bring sourcing operations closer to users and supply markets.

"Partnering with Kearney is an exciting opportunity for us to expand our reach and ensure we can offer our spend management capabilities in the most complex and largest of enterprise situations," said Chirag Shah, CEO of Simfoni. "By combining our technology and tail spend expertise with Kearney's distinctive, agile approach to strategic consulting, operations, sustainability, and governance, we can broaden the scope of our delivery of a comprehensive procurement solution that drives truly impactful outcomes for our clients."

Based in Chicago, Kearney has particular depth of expertise in operations and supply chain engagements. The consulting firm has more than 4,200 employees across 60+ offices globally.