Tengo untangles the messy world of public sector procurement with AI

Tengo uses AI to find, evaluate and respond to public tenders. It’s a software-as-a-service tool that helps companies handle public tenders at scale — a bit like Govly in the U.S. Originally created within the startup studio Hexa, the startup has raised a €3 million funding round led by Point Nine ($3.2 million at current exchange rates).

For most companies, public tenders represent a large untapped market because they require significant resources. In France alone, there are more than 200 platforms that host public tenders. And even if you identify opportunities, it requires quite a bit of time to put together a strong application.

That’s why many companies rely on freelancers or consulting firms to outsource this type of work. But Tengo believes that technology could potentially simplify the entire value chain of public tenders.

“In France, the government spends half a billion euros every day — the government in a broad sense, including ministries, regions, departments, parapublic agencies, cities, etc.,” Tengo co-founder and CEO Hugues Renou told TechCrunch. “In concrete terms, it’s roundabouts, school chairs or a training service.”

Clients first create a feed of public tenders by defining their criteria. After that, Tengo scans all the public portals that host tenders to find new tenders that would fit those criteria.

Public tenders are usually extremely precise to avoid corruption or overspending. So companies often end up reading through documents that can be up to 50 pages long and describe what the government is looking for.

One of Tengo’s client is OpenClassrooms. “Tenders for training courses are published every day. However, they are only interested in training courses that are 100% online,” Renou said. Instead of parsing through documents, Tengo identifies this element automatically, as well as 40 other criteria.

As you may have guessed, Tengo uses artificial intelligence to analyze the information contained in those documents. It can highlight key aspects but also reference important pages.

Like many modern software-as-a-service tools, Tengo also acts as the central repository for all things related to public tenders. Companies get an overview of all the applications that are currently in progress. Employees can add comments and share a tender with another team member. Tengo customers can also receive alerts when a tender is about to expire and get renewed.

And when it’s time to submit an application, Tengo has built-in AI integrations to generate documents. I’m sure many companies are using ChatGPT or another LLM-powered chat assistant to answer public tenders already. But with Tengo’s integration, you don’t have to switch to another service.

Eventually, Tengo hopes that multiple Tengo customers will be able to collaborate and provide a joint application to a public tender. “The government encourages SMEs to bid for public contracts, because they have a level of expertise that big companies don’t, but also because it’s a way to use public money to fund many more companies in the economy,” Renou said.

The startup, which was founded last year, is still in its early days as it has only attracted dozens of clients. But some of its first clients include OpenClassrooms, Citron, Theodo and Carrefour Pro. Now, let’s see if it can turn this product work into a successful business as there are more than 40,000 companies that respond to public tenders in France.