Artificial intelligence companies that can help even bigger companies to get paid are likely to make a fair bit of money themselves, if the example of Stuut Inc. is any indication.
The company today said it has closed on a Series B funding round worth $52.5 million, bringing its total amount raised to $93 million to date. What’s really notable about the round isn’t so much the money, but the investors, which are among the biggest venture capital firms in Silicon Valley. Insight Partners led the round, with participation from Andreessen Horowitz and Microsoft Corp.’s M12.
They’re backing Stuut because they believe it’s going to make a lot of people a lot of money. The startup is targeting one of the biggest challenges in doing business today – actually getting paid by your customers and clients. It says it wants to fix a broken order-to-cash process that typically wipes out up to 5% of the average enterprise’s revenue each year. That’s not an insignificant number, as it amounts to more than $1 trillion annually if you consider the amount of revenue the Fortune 500 pulls in each year, Stuut says.
This money is lost because what should be a fairly simple process breaks down due to trivial administrative errors, such as missing purchase orders, bad data or invoices sent to the wrong people. Because of these errors, finance departments have to chase down missing payments manually across multiple different billing and invoicing systems, payment portals and so on. These mini-investigations eat up thousands of hours annually, and that’s where the money is lost.
Stuut thinks it can fix this, and its solution won’t surprise anyone. It’s using AI agents to automate the entire order-to-cash cycle from end-to-end. Its platform covers everything from order management to invoicing, credit to collections, cash applications to payments and even handles disputes.
Even better, its customers don’t have to abandon the existing software they’re using. Stuut integrates its agents directly into existing enterprise resource planning and customer relationship management systems and payment gateways.
Stuut co-founder and Chief Executive Tarek Alaruri explained that for each customer, its platform builds up a “living memory” of its payment behavior and portal quirks, which provides the context it needs to chase up missing payments automatically. “Most businesses don’t have the bandwidth to segment their base or give customers the level of service they deserve,” he said. “By leveraging AI, we’re able to deliver the only solution with continuous learning loops to improve the customer experience, reduce churn and deliver better financial performance.”
According to Alaruri, it’s harder than ever for enterprises to keep up with manual payment collections because of a severe shortage of qualified financial experts. More than 300,000 accountants have left the profession since 2019, which is one of the main reasons why U.S. businesses are chasing a combined $7.2 trillion worth of unpaid receivables. Existing payments and billing software simply organizes things, but it does little in terms of executing the work needed to ensure invoices are paid on time.
By matching more than 95% of incoming payments with orders automatically and facilitating more than 81% of outbound collections without any human intervention, Stuut says it can cut the average customer’s days sales outstanding by 47%. That’s why it has grown its customer base more than fivefold in the last year, processing more than $3 billion worth of payments during that time.
Its client list now extends to more than 150 large enterprises, including Verifone Inc., Bishop Lifting Products Inc. and ZoomInfo Technologies LLC. With ZoomInfo, Stuut was able to help it reduce time-to-first-touch by more than 90% while reducing its days sales outstanding from 51 to just 40 days.
Julian Marcu of Insight Partners said many businesses have more cash tied up in receivables than they realize. “A single invoice error can trigger weeks of follow-up across teams and systems and at scale that adds up to real revenue left on the table,” he explained. “Stuut has figured out how to use agents to execute that recovery process and match cash to invoices while fitting naturally within the controls, workflows and systems finance teams already use.”
Stuut not only aims to help customers get paid faster, but also expand deeper into enterprise financial infrastructure. With the funds from today’s round, it’s going to invest in credit scoring, lending and automated fund movement services, as part of its overall goal of managing businesses’ entire transaction processes, from initial sales to the final bank deposit.