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At times, one must pause to admire the pluck of the Estonians. The Rotermanni Kvartal or Quarter adjacent to the Port of Tallinn has been turned around from a glum post-industrial wasteland of charred warehouses to this gleaming fusion of 19th-century stonework and sleek 21st-century metal and glass within some speedy, development-spiked years is a marvel in itself. The reason for a little more celebration is that it might soon host the largest AI company in Europe.
The fact that the firm climbed to this perch by scoring deals with Fortune 500 companies is admirable. And imagine accomplishing all of that while working diligently away in your slippers and socks. At Pactum AI, the first rule is to leave your shoes at the front door. As do I, upon entry.
“Our ambition from day one was to succeed by winning the market,” says a slippered Kaspar Korjus from the other side of a meeting room table. Korjus is the co-founder and CEO of Pactum AI, which offers Negotiations Suite, an AI-backed platform that supports autonomous negotiations between customers and suppliers. This helps them find each other more efficiently and make better deals. Pactum has won over clients like Walmart, Maersk, and Vodafone.
This success, he says, has been due to its decision to go immediately after the biggest clients.
“We didn’t want to start out in the Baltics and go to the Nordics and then have some company from the US that was doing the same thing just kill us,” he says. “We wanted to be in the US.”
To get there, they naturally headed a few hours south into the rolling Estonian countryside to the provincial town of Viljandi. At Cleveron, a renowned manufacturer of innovative parcel locker solutions, Pactum AI was allowed to pitch to a visiting delegation of Walmart executives. Things went well, and within four months, Pactum AI signed Walmart as a customer. That was in 2019. Pactum AI signed the world’s largest company a few months ago. “That helped us to reach other Fortune 500 companies,” he says of the deal. “Walmart were our first fans.”
Expansion
The big news at Pactum AI these days is expansion. When the company did its maiden pitch to Walmart, it had three co-founders and a secretary. As of this wintry December office visit, the company has 100 employees. According to Korjus, there are plans to hire about 30 more in 2025. About 10 will be in R&D and the remainder in sales and marketing. Finding new talent for Pactum AI is not a problem. There is a bevvy of similar technology companies in town. If there is any real evidence of Estonia being the purported Nordic Silicon Valley, then this is it.
Wolt, Bolt, Pipedrive, Veriff. These unicorns are just a few minutes’ drive away by Bolt.
“People have been working at these companies for more than four years,” remarks Korjus. “Life is short, and you want more experiences.” Most of the new talent insourced is thus local, though not necessarily Estonian. Like its Californian counterpart, Estonia’s community is also diverse.
“Because we are building complex AI, we need very senior engineers,” acknowledges Korjus. “We get these mostly from existing Estonian unicorns.”
During the interview, all kinds of characters filter behind Korjus. Men and women, long-haired and short-haired, have beards, are clean-shaven, wear sweatshirts and skirts, and wear more business-like attire. Pactum AI’s team is an interesting crew. Yet, one will not find the usual accoutrements of a startup lifestyle. There are no ping-pong tables on site. “We decided not to hire a dog as our chief happiness officer,” Korjus says. “Our brand is luxury, enterprise, serious, professional, and innovative.”
That brand is also spreading beyond Estonia. According to its website, we should sit on West El Camino Real in Mountain View, California. This is the address of its US office. However, most of the company is based in Tallinn, where about 50 people are involved in product engineering. Its American operations are expanding, mostly in sales and marketing.
“In the US, we are scattered territorially and very sales-focused,” Korjus says. This makes sense, as the firm’s clientele continues to be American publicly listed companies. But not only. One strategic partner and major investor is Maersk, the Copenhagen-based shipping and logistics firm. Maersk participated in Pactum AI’s Series B round, which closed in July. The company raised $20 million, which brings the total funds raised to $55 million.
Korjus says the proceeds from Series B will be used to fund hires and further innovation.
Improving negotiations
There was a time when Korjus was not sitting at the top of the pyramid of an expanding AI-based enterprise. He once led Estonia’s e-Residency programme as its managing director for five years, from 2014 to 2019. By the end of the decade, the program was about to embark on its second five-year strategy, stylized as e-Residency 2.0, and Korjus was tired from working in the demanding public sector. He was always a technology nut and went to a coworking space in Tallinn’s Telliskivi neighbourhood one day. He posted an email to a Facebook group, saying he was looking to develop ideas for a startup. The premise was that AI could automate the processes involved in routine negotiations. This would save time and money.
“If you have 100 suppliers, 80 per cent of them are never reached,” says Korjus. “So most of the money you spend negotiating deals with them only reaches 20 per cent of those players.” Yes, companies could spend more time reaching out to everyone and perhaps receive a slight discount, whether they are involved in the procurement of goods or the hiring process. But the amount of savings doesn’t justify the effort. “It’s not even worth my email,” says Korjus.
Even if a firm’s entire staff were engaged, they could never conduct negotiations with everyone. With an AI chatbot, however, they can. “You can get quotes and savings,” says Korjus.
Korjus was assisted in co-developing this idea by his brother, Kristjan Korjus, who now serves as Pactum AI’s chief technology officer. The company’s third co-founder is Martin Rand, an entrepreneur with a pedigree that dates back to Skype, Estonia’s breakthrough technology story, where he was a product manager from 2006 to 2010, a year before Microsoft bought it. Rand, now president of Pactum AI, served as CEO until July. He lives in the US.
Five years since that fateful Facebook post, Kaspar Korjus continues to oversee the improvement of the company’s platform. Like tireless North Pole factory elves in the weeks before Christmas, Pactum AI’s engineers are busy improving interfaces for suppliers and users or tweaking the AI to improve contract renewal negotiations and manufacturing price lists. And just like at the North Pole, the snow is cascading down beyond the glass windows of its offices.
“We are focused on improving negotiation results,” says Korjus on the thrust of Pactum’s development efforts. “This involves understanding the strategies and tactics of negotiations and how we can produce more win-win deals.” Companies await. “The value proposition is so clear for them,” says Korjus. “That’s how you get access to the largest corporations in the world.”
A very wide concept
Korjus acknowledges that the use of AI continues to evolve, just as Pactum AI has. When Korjus started the company, AI mostly meant machine learning. The large language models were the AI du jour. In 2024, agentic AI is on the tips of everyone’s tongues. “Things that were seen as AI 10 years ago aren’t seen as AI anymore,” said Korjus. Now we see them just as software.”
For its part, Pactum AI has tried to flesh out and understand every AI element as it comes along. Agentic AI is very useful for the company’s chatbot-driven platform. Large language models were used less and in different scenarios. The company is also keen to promote and educate the public about the value of automatic negotiations. When it announced its Series B, it also announced the existence of the Autonomous Negotiations Academy.
The Academy, a new initiative of Pactum AI, has an office on Broadway in lower Manhattan opposite the famous Charging Bull statue. Here, it is working to certify procurement experts as autonomous negotiation experts and cement automatic negotiations as “the new normal.” The company hopes to train a new cadre of procurement specialists by offering certification courses. Its first course will be available to interested parties later this year.
