For most large organizations, there comes a point when managing all the different staffing vendors on a national or global basis becomes too complex, tedious or both without the help of technology. It was for exactly this reason that vendor management systems rose in prominence, and today nearly all mature contingent workforce programs run their business with the help of such technology. It turns out many staffing firms themselves also manage their own list of suppliers, and could benefit from many of the same efficiencies available to corporate clients using VMS technology; yet there has been little interest in serving a staffing demographic.

Enter Gustav, a New York-based and Y Combinator funded startup that’s built a VMS for midsize to large IT staffing firms to manage their vendors and find new ones more efficiently. “My vision is for Gustav to be the underlying technology that powers the contingent economy,” says founder and CEO Jan Jedlinski. “The same way Zuora powers subscription businesses, we want to enable more flexibility for workers, clients, and staffing companies. And not just offer it to large systems, but to small companies as well.”

Gustav is a VMS-like system for midsize to large IT staffing companies to manage their sub-vendors (i.e., other staffing companies), as well as find and tap into new verified third-party vendors. Companies sign up for Gustav through its website and invite sub-vendors to the platform either via email or an ATS integration. They then use the system to perform mass job distributions, manage vendors via KPIs/performance metrics, communicate with vendors and create tiered vendor lists. In some cases (for example with staffing firms that use Bullhorn), Gustav is so tightly woven into the ATS it is offered as a module of the ATS, and users never leave the system.

Unlike the traditional VMS, pricing is free for both the “prime vendors” (those that are managing sub-vendors) as well as sub-vendors invited by a “prime.” The firm makes money when sub-vendors wish to access jobs from other “primes” via a membership fee for access to such jobs, which creates a marketplace dynamic. Since the firm has access to historical performance data, it is also able to vouch for the quality of vendors on the marketplace. The firm currently primarily targets IT staffing firms because such firms often rely on sub-vendors to fill niche roles, though they have broader long-term ambitions.

“We’re helping solve the candidate sourcing piece for corp-to-corp businesses,” says Jedlinski. “In two to five years, Gustav will be the only place where a staffing company of any size can drop into a website and have an out-of-the-box VMS with a full staffing marketplace ready to go.”

The firm, founded in 2016, seems to have found its footing. It has raised $2.5 million to date from YouTube co-founder Jawed Karim, Y Combinator, as well as European power VC Speedinvest, and has onboarded more than 400 subvendors and counting.

The Buzz

The rise of VMS has demonstrated the value that technology can bring to supplier management and sourcing. Now staffing firms large and small can leverage that same power to drive their own businesses forward.