Levelpath, a procurement software program startup based by the duo behind Scout RFP, has raised $55 million in Sequence B funding led by Battery Ventures as the corporate seems to quadruple its income this yr.
The funding spherical additionally noticed participation from current buyers, together with Benchmark, which led Levelpath’s $14.5 million seed spherical, and Redpoint, the lead investor within the $30 million Series A round introduced in 2023.
The startup was based by Stan Garber and Alex Yakubovich (pictured proper), whose earlier startup, Scout RFP, was acquired by Workday for $540 million in 2019. Throughout their three years Yakubovich and Garber spent working at Workday, the 2 recognized persistent procurement challenges that motivated them to construct a mobile-first, user-friendly platform.
Levelpath’s timing proved fortitous; launching proper as ChatGPT debuted has enabled the startup to combine AI capabilities from its inception. This contains reviewing unstructured knowledge in contracts and recommending cheaper, related services. The corporate now counts Ace {Hardware}, Amgen, Coupang, and SiriusXM as prospects.
The funding alerts confidence in Levelpath’s quick progress and its potential to disrupt a market dominated by legacy gamers. Procurement software program has lengthy been managed by outdated distributors like Coupa and Ariba, whose clunky programs usually drive staff to bypass official processes. This “rogue” spending utilizing company bank cards often leads to overspending and missed alternatives for bulk reductions, in accordance with Battery Ventures common associate Neeraj Agrwal.
In reality, procurement represents firms’ second-largest expenditure after payroll, making software program enhancements notably useful. The procurement software program market was valued at $7.3 billion annually in 2023, in accordance with Fortune Enterprise Insights.
Though Levelpath is a more recent and certain smaller participant in comparison with its foremost rivals — together with Zip, valued at $2.2 billion final fall, and Oro Labs, backed by Felicis — the corporate appears to have all the suitable substances, together with Agrawal, who led Battery’s Sequence B funding into Coupa and has joined Levelpath’s board.
Coupa, after all, grew into some of the profitable procurement firms of its period. It had a profitable IPO in 2016 and eight years later, was taken non-public by PE agency Thoma Bravo for $8 billion.
Agrawal, who probably understands what it takes to construct a giant enterprise on this class, is equally impressed by Levelpath’s know-how and its founders. “They’ve such a robust status for delivering product, being good folks to work with, and doing what they are saying they’re going to do,” Agrawal instructed TechCrunch. “Prospects need to work with them and assist them construct this next-generation product.”
Yakubovich and Garber have been buddies since attending highschool in Ohio. They bonded over their shared heritage as immigrants from the previous Soviet Union and a mutual curiosity in entrepreneurship. The pair have been working collectively for over 20 years, and their acknowledged objective is to assist prospects get pleasure from, fairly than keep away from, utilizing procurement software program.
Whereas procurement may seem to be an earthly enterprise operate, it gives a direct and vital return on funding by serving to firms lower your expenses.
“It makes the money register ring due to these financial savings,” Agrawal stated.