AI supply chain startup Tacto is set to raise funds from Sequoia. It’s already in talks to bring in more cash.

• German AI supply chain startup Tacto is set to raise a new funding round from Sequoia, sources say.
• The deal is the latest example of a US investing giant piling into a small AI startup.
• Tacto is already in talks to raise another round in addition to the Sequoia deal.

Tacto, a small German AI supply chain startup, is set to raise new funding from US giant Sequoia and is already in talks with another high-profile investor.

The Munich-based company, which was founded in 2020, has created a platform for SMEs that provides a view of their supply chains, sourcing processes, and transportation workflows.

Six sources familiar with the deal told Insider that Sequoia will lead Tacto’s Series A round. According to three sources, the round will be worth around $20 million and will value the company at 75 to 100 times its annual revenue. According to two sources, this would put the three-year-old company’s post-money value at around $135 million.

Surprisingly, the startup has already begun discussions to raise additional funding in addition to the Sequoia deal. Such a rapid succession of funding rounds is unusual and usually indicates intense investor interest in the company.

Tacto is also in talks with Index Ventures in London to immediately raise another round of funding, according to five sources. Index has approached Tacto about pre-emptively leading a larger round of funding into the company.

When Insider contacted Sequoia and Tacto, they declined to comment. Index Ventures did not respond immediately to a request for comment.

The presence of Sequoia demonstrates the increased interest of large US funds in young European startups. Andreessen Horowitz led a seed round in ElevenLabs, a tiny AI startup, in March, and is also in talks with Mistral, a months-old company. This week, US fund Coatue invested in the seed round of Dutch payment startup Fero.

Tacto is the most recent startup to discuss a pre-emptive funding round, in which investors present deal terms to in-demand companies before they begin their fundraising process. The decline in growth funding has contributed to an increase in such transactions.

This year has seen pre-emptive deals for fintech Payrails, sales software company Cello, and climate tech company Axle Energy.

The prospective second transaction has not yet been closed or finalized and is thus subject to change. According to two sources familiar with the process, the deal could give Tacto an even higher valuation of around $300 million.

Cherry Ventures, a Berlin-based venture capital firm, led the company’s $5.6 million seed round in March 2022. Participants included UVC Partners, Visionaries Club, and angel investors, including Personio CEO Hanno Renner.

Tacto’s fundraising comes amid a bad year for venture capital in Europe, where funding for startups is expected to fall by nearly 46%.