September 20, 2023

Procurement management platform Levelpath raises $30M

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Back in 2014, Stan Garber and Alex Yakubovich set out to reinvent the request for proposals (RFP) process with the launch of Scout RFP, which provides a cloud-based sourcing solution designed to help organizations source faster — and, ideally, easier. Scout RFP was acquired by Workday in 2019, and Garber and Yakubovich decided to stay on under Workday’s management following the purchase. But while at Workday, the pair experienced major challenges with business procurement.

‘After Workday acquired Scout RFP, we began experiencing everyday pain points — chasing down the right person to approve a happy hour budget, finding which vendors we could purchase swag from or even getting an NDA spun up to sign,’ Yakubovich told TechCruch via email. ‘Then, of course, there are the endless emails and Slacks associated with these various activities. The time-consuming nature of the tasks created barriers to getting our work done, and we realized just how much data was siloed and the time inefficiencies it was causing across the organization.’

These blockers drove Garber and Yakubovich to found Levelpath, a software-as-a-service platform to manage various enterprise procurement services. In an apparent sign that they’re on the right path (no pun intended), Levelpath today announced that it raised $30 million in a Series A round led by Redpoint with participation from Menlo Ventures, which follows an unannounced $14.5 million seed round led by Benchmark with participation from NewView Capital and World Innovation Lab and brings the startup’s total raised to $44.5 million.

It’s not a secret that enterprises struggle with procurement. According to a Harvard Business Review study from 2020, approximately 60% of business leaders say that a lack of transparency between their finance and procurement functions represents a risk to their business. Data quality and governance are frequently cited as the biggest roadblocks for procurement teams, which often struggle to gain visibility into procurement processes.

Now, it should be noted that lots of startups are angling to corner the market for procurement software, which Fortune Business Insights valued at $6.15 billion in 2021.

Zip is one of the larger players in the sector, having recently raised $100 million at a $1.5 billion valuation. Fintech startup Ramp expanded into procurement just a few months ago. And then there’s small-time, more specialized vendors like Focal Point, Keelvar and Tropic.

So what sets Levelpath apart?

Yakubovich claims it’s the platform’s mobile-first (yes, really) interface, which he describes rather subjectively as ‘next-gen’ and ‘easy-to-use.’ While Levelpath can be used by smaller firms, Yakubovich says, it’s intended for enterprises managing hundreds or thousands of vendors and employees — offering tools customized for each company’s approval workflows.

‘Often, what seems like a simple procurement request, such as purchasing a software seat, turns into an endless trail of phone calls and emails — trying to garner approval from all the right people,’ Yakubovich said. ‘For example, suppose a marketing executive is purchasing swag for an event. In that case, a filter their company may have on is one that flags any purchases over 5,000 to the department head for approval. If this person’s purchase is only 3,000, they may proceed to their list of approved vendors and begin ordering. Or, if they’re signing a sponsorship contract, it may connect this person with their department head and the legal team to complete their specific approval process … Levelpath funnels their responses to the right procurement leaders.’

AI plays a differentiating role, too, according to Yakubovich. Algorithms built into the Levelpath platform provide ‘actionable insights’ to reduce instances of vendor redundancy. And Levelpath’s building an AI model that understands the purchasing and workflow habits of employees and adjusts the procurement experience based on this. For example, if someone in an organization wanted to purchase software, Levelpath would run through the enrichment data and let the user know of software vendors that offer similar, potentially cheaper products that meet their typical criteria.

The goal is to help companies decide where to consolidate and restructure their services, Yakubovich says. ‘We’re the first platform to build with the end-user experience as the guiding light for our entire product roadmap,’ he added. ‘Our mission is to make procurement delightful.’

That’s an ambitious mission. But Levelpath claims to have dozens of enterprise customers already, including Ace Hardware, Qualtrics and Innovacare.

With a staff of 26 employees — a number Yakubovich expects will double next year — Levelpath plans to commence a broader go-to-market strategy in 2024 while putting its latest funding tranche toward product development and research.

‘Companies are looking to save money and focus more on the procurement process,’ Yakubovich said. ‘It’s never been a better time to invest in this space.’

Reference: https://techcrunch.com/2023/09/18/procurement-management-platform-levelpath-raises-30m/

Ref: techcrunch

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