Supply Software Clicks for Clients

Purchasing is not the sexiest part of managing a firm, but Shaz Khan and the other executives at Vroozi see it as an opportunity. The Sherman Oaks company has developed a cloud-based system for ordering office supplies, computer equipment or anything else a business needs for its operations, and doing so more efficiently, easily and quickly than the old-fashioned manual alternative. After all, Khan believes, if you can book a hotel room or make a dinner reservation online, you should also be able to do the same with routine business purchases. “We look to take that paper process and move it to a complete digital process,” said Khan, chief strategy officer. Founded in 2012, by Khan and Richard Chala, the chief product officer based in San Francisco, Vroozi has moved from the startup phase into the growth phase in a big way. Among its customers are aerospace and defense giant Northrop Grumman Corp., in Falls Church, Va., and Grupo Bimbo S.A.B. de C.V., the largest bakery in the world, based in Mexico City. The company recently partnered with Amazon Business to make millions of products available through that online retailer and received $4 million in venture capital to expand its U.S. and European sales force. Vroozi currently has 60 employees split primarily between the San Fernando Valley and offices in Lahore, Pakistan. There are 18 positions that will be filled by the end of the year, said Khan, who lives in Encino. Ally Holdings, an Irvine private equity firm that has been the sole investor in the company, led the recent financing. Vroozi Chief Executive Steve Olds is also a principal in Ally Holdings. The demand for Vroozi’s system has grown globally, Olds said. “In the last 12 months, we saw mid-market companies to Fortune 500 enterprises across different industries becoming Vroozi customers,” Olds said in a prepared statement. Ally invests in growth companies in a variety of industries including tech, health care and online surveys. It takes an equity stake and a board seat in the companies in which it invests. Vroozi started with a focus on Fortune 1000 businesses and now is expanding into the middle market, or companies with $50 million to $1 billion in revenue. Companies of that size tend to still do their purchase using spreadsheets and carbon copies, Khan said. Paul Blake, senior manager of technology marketing at GEP Worldwide, a procurement consulting and outsourcing firm based in Clark, N.J., agreed with that assessment. There likely is a large number of middle market companies still doing procurement analysis in Excel spreadsheets, contracts drawn up in Microsoft Word and sourcing by email, telephone calls and written requests for proposals, Blake said. “They are right – there is a lot of manually conducted or semi-manually stuff out there,” he added. The company’s business model is to charge a monthly fee of $30 to $60 per user. In large companies, that number can average from 500 users to 1,000 users, while the mid-market range is 50 people up to 200 people, Khan said. The process involves a company registering through the Vroozi website and then having access to suppliers, such as Home Depot or Staples that they can then order from. The clients are also able to set up their own internal workflow processes, such as approvals and budgetary limits. “It is self-service tool that allows companies to manage their spend and connect with suppliers within a few days,” Khan said. Predictive ordering Khan grew up in Westlake Village in a family of entrepreneurs. It was a tech heavy environment during his childhood and teen years filled with floppy discs and Apple IIE and IBM computers. After graduating from Berkeley with degrees in economics and computer science, Khan worked at accounting firm Ernst & Young where he was introduced to the world of procurement. With Vroozi, Khan wants to take a staid, antique process of ordering supplies and make it better. From day one, a business is able to use the system which in the past would have taken months to implement, Khan said. “We are bringing functionality to the work place,” he added. Vroozi’s management has a philosophy of being mobile first as the next generation of mobile technology comes into the workplace. There is an insatiable appetite for doing things with smart devices, Khan said. With the Vroozi platform, a purchasing director for a company can order lighting equipment, for example, with just a smart phone and not have to interact with another person. “That is the space where we play,” Khan said. Competing software developed by GEP differs from that offered by Vroozi in that it unifies in a single system the steps in the procurement process that separate pieces of software once handled individually. “The cloud element is strategically important,” Blake said. “The way in which software is being utilized by procurement organizations is changing.” Vroozi is taking steps to bring cutting-edge technology such as machine language and artificial intelligence that allow for predictive ordering to its software. “If you know that ink is going to run out based on your purchase history, it can project that ordering capability and order it for you,” Khan said. Voice-based ordering is another area that Vroozi is looking into, following on what some pizza franchises are doing, Khan said, In early 2014, Domino’s Pizza brought out its voice-based ordering app, and Pizza Hut followed with a system of its own this summer. “That same concept is now coming into workplace ordering,” Khan said. Named for speed The origin of the company’s name was inspired by a friend of Khan’s who had a personalized license plate, “Vroom12.” Vroozi was a play on the word vroom, which to Khan means speed and acceleration to market. All it took was adding in a “z” and an “i” to get to Vroozi, he said. Its offices are on the second floor of a small office building on Ventura Boulevard that it shares with Talpa Media USA, the American production company of Dutch content producer Talpa Media, and creative agency VaynerMedia. The individual offices within Vroozi’s space has a prototypical tech firm vibe. They feature glass walls coated with a substance that allows writing on them, as well as whiteboards. One area of the office is the mobile testing lab where the engineering staff can put software they have developed into action on Android and iOS tablets and smart phones. Next to that is an area with beanbag chairs, a foosball table and an acoustic guitar leaning against the wall. There are a lot of musicians among the staff, and it’s not uncommon for a hootenanny to break out on Fridays, Khan said. The science fiction fans among the workforce are responsible for the “Star Wars” imagery found around the offices in the form of Darth Vader figurines and masks. The staff takes part in team lunches and outdoor activities such as hikes in the nearby Santa Monica Mountains that get the creative juices flowing, Khan said. After all, sitting behind a computer for eight to 10 hours a day is not the healthiest lifestyle, he added. “We believe you have to get out and breathe fresh air to be able to innovate and get better ideas,” Khan said.