Tailor ERP Raises $22M Series A - Headless ERP Startup

Tailor Secures $22 Million in Series A Funding

Tailor, an enterprise resource planning (ERP) platform headquartered in San Francisco and Tokyo, has successfully completed a $22 million Series A funding round. The investment was led by a group of prominent investors including ANRI, JIC Venture Growth Investments (JIC VGI), New Enterprise Associates (NEA), Spiral Capital, and Y Combinator.

The Shift Towards Headless ERP Systems

Traditional ERP systems often present users with a unified interface encompassing all essential functionalities. However, this approach can prove restrictive, limiting options for tailored customization. Yo Shibata, co-founder and CEO of Tailor, explained to TechCrunch that a “headless” ERP system decouples the user interface from the core ERP functionalities.

This separation allows the back end – responsible for critical processes like inventory control and accounting – to operate independently from the front end, enabling businesses to choose or develop their preferred user interface.

Omakase and AI-Powered Automation

Tailor’s system, known as Omakase, facilitates secure access to its ERP functionalities for AI agents via API. This capability enables the automation of tasks such as summarizing customer data and initiating automated workflows, as Shibata detailed.

Competitive Landscape and Tailor’s Advantage

The ERP market is highly competitive, featuring established industry giants like SAP and Oracle, alongside specialized vertical SaaS solutions such as Crater and Stitch. Shibata is confident that Tailor’s “headless” architecture and high degree of customizability will provide a significant competitive edge.

The Future of ERP: Modular and Programmable

“With coding becoming more accessible and AI agents assuming a greater share of operational responsibilities – currently around 50% and projected to reach 90% – businesses are seeking systems that can be assembled rather than rigidly coded,” Shibata stated. “We envision a future for ERP that is modular, programmable, and designed for seamless collaboration between humans and machines.”

Expanding Beyond Retail and E-commerce

Initially, Tailor’s product was geared towards the retail and e-commerce sectors, industries facing unique challenges related to dynamic supply chains, market expansion, and geopolitical uncertainties, according to Shibata’s discussion with TechCrunch. Omakase streamlines operations by automating workflows and managing key business areas like inventory, fulfillment, finance, purchasing, and omnichannel management.

However, the company is now experiencing a surge in inquiries from diverse sectors, including B2B, and is broadening its services to encompass companies beyond the retail and e-commerce domains, Shibata confirmed.

Complexity of B2B Operations

“B2B operations are inherently more complex than B2C, involving not only inventory sales but also the management of future and advanced orders,” Shibata explained. “Businesses may also require personalized product offerings, which further increases operational complexity.”

Company Growth and Leadership

Founded in 2021 by Yo Shibata, a former McKinsey consultant and serial entrepreneur, and Misato Takahashi, CTO, Tailor has experienced substantial growth. The startup now employs approximately 50 individuals across Japan, the U.S., and other countries, a significant increase from the 10 employees it had in 2022.

A Flexible, API-First Approach

The CEO articulated the company’s long-term vision: “Instead of providing a comprehensive, inflexible suite, we offer a modular, API-first platform that businesses can tailor to their specific requirements, much like Shopify supports both prebuilt storefronts and headless commerce. Some clients utilize it as a complete ERP solution, while others leverage it as a back end and construct custom tools or interfaces. Our objective is not to impose a one-size-fits-all model, but to empower teams with the flexibility to scale and customize ERP to align with their unique workflows and tools.”

Strategic Allocation of Funds

The 4-year-old startup intends to allocate the newly acquired funds to three primary areas: expansion in the U.S. market, product development, and strengthening operations in Japan.

Priorities for Growth

“We are accelerating our U.S. expansion by establishing a dedicated go-to-market team and increasing our presence among mid-sized and enterprise-level customers,” Shibata shared with TechCrunch. “Furthermore, we are making substantial investments in product development, particularly in enhancing our ERP modules and AI capabilities. Finally, we will continue to scale our Japan operations by expanding our delivery and customer success teams to support our growing customer base.”