It’s common for startup founders to compare themselves to the Ubers or Facebooks of the world when they are trying to explain their idea’s potential. For St. Petersburg-based Protoco’s founder Michael Otis, a procurement software startup going after the SMB market, HubSpot is that company to look at.
“The analogy I tend to make is what we’re doing is very similar to what HubSpot did 15 years ago,” Otis said. “When they started, there were plenty of other CRMs, Salesforce was already huge.” HubSpot, of course, made its mark as a CRM platform for customer support, sales, and marketing efforts and is now ubiquitous in the marketing world.
Protoco is doing that for procurement. From the beginning of the company, Protoco was designed to make the procurement process “simple and affordable and accessible to everybody,” Otis told Hypepotamus. “But that [idea] has become even more prescient when spend is a concern for everybody. No one is more concerned about cutting costs than the folks that are bringing in additional spend to a business.”
Protoco initially got off the ground in Atlanta but the co-founders decided to move to Tampa during the height of the pandemic. The move, Otis said, was “partially a business decision, but also partially a personal decision” to live near the water.
That move seems to have paid off, as Otis has become active in the local startup and investor community. He recently announced that Protoco has secured a $750K pre-seed round, of which the majority of the funding came from TampaBay.Ventures and a group of angels in the Tampa region. $125k of the pre-seed round comes from Y Combinator (Protoco was a member of the YC W21 cohort).
Protoco joins the TampaBay.Ventures’ portfolio with other local startups in the insurtech, fintech, and HR space.
Since Hypepotamus last caught up with Otis in March of 2021, the team and the product have transformed in some pretty meaningful ways. The team is now three people, including Otis, a back-end engineer, and a front-end designer. On the product side, Protoco has been focused on PLG (product-led growth model), so users can start with the platform through a free version without an extensive onboarding process.
That is particularly appealing to the small and medium-sized businesses Protoco is going after. “People in smaller businesses just don’t want to be buying software by talking to a salesperson and then looking at a demo and then a deck and a ten-page contract,” Otis told Hypepotamus.
Protoco is building at a time when procurement efforts are top of mind for businesses dealing with supply chain issues and general economic uncertainty.
“Now, it’s much more about being creative about how you can reduce spending and how you can automate the process so that less time, less energy, and less money during the procurement process,” Otis added.