Germany’s Tacto Technologies, which offers software to manage the complexities of supply chain, has raised €50m ($54m) in funding.

Investment companies Sequoia Capital and Index Ventures led the funding round, which was joined by the company’s existing investors Visionaries Club, UVC Partners and Cherry Ventures.

The Munich-based company’s offering, called Tacto, is an OS powered by AI for supply chain management.

Small and medium-sized enterprises (SMEs) across all industries that produce a wide variety of tangible goods, such as board games, cleaning products, and tunnel boring machines, are said to use Tacto.

The startup said its AI-powered software makes it possible to monitor suppliers, handle ESG compliance, and purchase sustainable materials under optimal circumstances.

By analysing data along the supply chain, including cost factors such as raw material and energy costs, Tacto’s AI can also uncover cost savings of up to 10% of the purchasing volume, it added.

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Tacto Technologies plans to use the funding to invest in AI and product development, and further increase its clientele.

The company aims to minimise emissions through sustainable procurement, save costs, and automate all manual supplier and compliance processes.

Tacto CEO and co-founder André Petry said: “Tacto is developing a software solution for future-proof supply chains for and together with SMEs in response to the challenges of today and tomorrow.

“The additional capital will allow us to further invest in our technology to help our customers remain competitive amidst ever-increasing supply chain complexity.”

Index Ventures partner Carlos Gonzalez-Cadenas said: “Supply chains have been heavily burdened by a wide variety of macroeconomic and regulatory challenges and the increasing complexity of globally networked production. Tacto’s product uses AI to help companies optimise the multitude of supplier relationships and materials, reducing both complexity and cost.”