Spend Matters is delighted to announce the 2024 roster for our ‘Future 5’ list. For the sixth year in a row, our analysts have highlighted five start-ups that excited them the most. This year, the five companies that have proven themselves as potential future trend setters are BlueBean, ivoflow, Covalyze, Halo Ai and True ValueHub.

To warrant such attention, these vendors must have a product that is ideally 2 to 5 years old, is used by more than five customers and displays an innovative application of technology. Moreover, these vendors must have less than $10 million in revenue and our analysts must find them both sustainable and growing with a clear momentum. In this series of articles, we explain what these vendors offer, why they are likely to become future members of our “50 Procurement Providers to Watch” and “50 Procurement Providers to Know” lists and what challenges they may face.

Get to know all the procurement tech providers that made our lists this year.

Today, we’re introducing another of our Future 5s: True ValueHub.

Read also our interview: An Introduction to True ValueHub.

What is True ValueHub

True ValueHub’s solution is an AI and cloud-based software that helps manufacturing companies achieve cost savings on purchased parts and assemblies in mechanical, electro-mechanical and electronics categories. The solution is meant to provide visibility into the total landed cost (Should Cost, Could Cost, Best Cost) of manufacturing parts and assemblies worldwide.

The company goes beyond traditional costing approaches through:

• The use of AI to perform a shape analysis of parts to understand the manufacturing process steps and deduce from it the cost elements to consider.
• A network approach where suppliers maintain rich information on their cost structures (SG&A, machine rates, etc.) to provide deep and accurate insights and auto-costing.

The combination of the above, together with strong experience in the field, means that the solution can be used on the buyer’s side to influence design decisions and on the supplier’s side to attract and develop business.

Why we chose True ValueHub

We included True ValueHub in the Future 5 for 2024 because it is a vendor that has a differentiated approach to costing. As mentioned above, it has distinct capabilities (e.g., shape analysis) and a unique take (network) that enables buyers to create a knowledge base of their parts to understand costs and/or analyze and identify similar parts. Because True ValueHub is collaborative in a way most costing solutions are not, the solution can support discussions and negotiations between buyers and suppliers based on facts, which is a condition for capturing more value for both sides.

Also, its approach could potentially change how the traditional sourcing process is executed. Instead of using RFXs, buyers and suppliers could benefit from the cost modeling and calculation capabilities to define and optimize prices of parts and products.

Threats or challenges ahead

It is important to remember that True ValueHub, like the other Future 5s, is a very young and small company. Its product launched in 2022, and while its product and roadmap is intriguing, it remains to be seen whether the solution itself will succeed long-term.

At this stage of its development, the company has, nevertheless, capabilities that make it stand out (e.g., shape analysis) in its mission to provide customers with Should Cost, Could Cost and Best Cost costing capabilities. The short-term roadmap is to automate should-costing for manufacturing companies, enable data-driven negotiations with suppliers and provide the ability for buyers to get instant quotes from suppliers.

However, True ValueHub’s vision extends beyond should-cost approaches. It aims to incorporate best cost opportunities that include manufacturability design considerations (e.g., alternative raw materials and shape of parts), Design-to-Cost and Design-to-Value to add significant value to the platform users over time. True ValueHub is also working on deepening collaboration capabilities, expanding beyond instant quotes into supplier discovery and ‘best fit’ supplier recommendations. This long-term vision will further enhance its capabilities and value proposition.

Another key element and challenge to consider is that the solution’s value proposition can be significantly enhanced by suppliers providing deep insight into their capabilities by declaring and maintaining their digital factory in the solution. With any solution that leverages a network effect, the key question is how quickly it will reach a critical mass of buyers and suppliers to fully leverage the self-reinforcing network effects.

Look out for more coverage of the Spend Matters Future 5 next week.