Prague-based SaaS startup Rossum has announced $100m in Series A funding, one of the largest ever Series A rounds to come out of eastern Europe. Founded in 2016 by three PhD drop-outs, Rossum is aiming to reinvent the way businesses send documents to each other.
“We believe that what RPA [robotic process automation] did for internal company processes really needs to be done for business-to-business communication,” Rossum cofounder and chief executive Tomas Gogar tells Sifted.
“We wanted to raise this significant amount just to be clear that we are going after it aggressively..
Major raise, major statement
Rossum claims to help companies not only understand what’s written in documents but also to exchange and process them, communicate and act based on the content, all using artificial intelligence. It typically saves users over 90% of the manual work, the company says, while removing much of the friction.
“We see documents as a form of communication, and we don’t want to be just an extractor of data. We really automate this process end-to-end in terms of B2B communication,” says Gogar. “That’s why it’s such a big round, because the potential is there and we are really, really well positioned to automate this space.”
Rossum typically saves users over 90% of the manual work around documents, the company says
According to Dealroom data, Rossum’s raise is the second largest Series A funding round to come out of eastern Europe so far, behind only Infobip’s July 2020 Series A round, which brought in $200m at a valuation of over $1bn.
However, the Croatian company had already been around for more than a decade at that point and had revenue of over €600m. Rossum is only five years old.
Rossum’s previous funding round was a $4.5m seed round in November 2019. Since then the company has exceeded its growth targets by a long shot, expanding five-fold over the last 12 months alone and onboarding some of the biggest companies in the world: it counts the likes of Bosch, Siemens and Veolia among its more than 150 global clients.
This latest round was led by General Catalyst, with previous investors LocalGlobe, Seedcamp, Miton and Elad Gil also participating.
Trevor Oelschig, managing director at General Catalyst, says that his firm was drawn to Rossum by the story of three founders who left academia to build a cloud-based AI engine to process documents.
However, the key aspect was the huge potential of the sector. Oelschig points out that every large enterprise deals with millions of documents a year — everything from purchase orders to invoices to documents like shipping manifests. “These all need to be processed and collaborated upon.”
“By also acting as a two-way data exchange that facilitates collaboration between companies, the return on investment is tremendous and is a far more strategic solution for enterprises,” he adds.
Dominating a new space
Gogar says demand is growing fast, and for companies like Rossum it’s all about the timing and talent. The company started 2021 with 60 employees and aims to be at 160 by year-end, with 300 by the end of 2022.
“Two years ago we were a data extraction platform,” he says. “What we managed to do in the last two years was really establish ourselves as the leader in this data capture space. We are now expanding from being a data capture solution into a platform that really automates B2B communication.”
“What I learned during Covid is that if you’re delivering efficiency to companies, you’re relevant whether it’s a time of prosperity or of financial crisis,”
Covid-19 has aided growth. At the start of the pandemic, when companies were forced to switch to remote work, many realised that they had back-office processes tied to their offices and physical paperwork. Rossum, which bills itself as a cloud-based universal document gateway, offers one potential solution.
“What I learned during Covid is that if you’re delivering efficiency to companies, which we do, you’re basically relevant whether it’s a time of prosperity or a time of financial crisis,” says Gogar.
Now flush with cash, Rossum plans to open new hubs across the US, Europe and Asia, in order to be closer to its customers. The company also plans to open an AI research centre in Prague, solely focused on automating B2B communication.
A $100m war chest
Gogar says they still need to improve the technology when it comes to areas like logistics and insurance processes, as well as expanding to cover every major type of document exchanged between companies.
“Currently we support PDFs, scans, Word documents and so on, but we want to support all different electronically readable documents,” he says. “There is a whole group of document formats that are basically stored as XML files, and we want to expand our capabilities in that direction.”
The potential customer base is almost limitless: every company communicates with the outer world via documents, and all of those will need to eventually automate the way they are doing it.
“There’s a never-ending increase in demand for automation and increasing efficiency,” says Gogar. “There are some early adopters, like Bosch, but sooner or later everybody will need to do it.”