Parspec Secures $11.5M in Seed Funding to Enhance Construction Product Procurement

Parspec Secures $11.5M in Seed Funding to Enhance Construction Product Procurement

Parspec, headquartered in San Mateo, CA, has successfully raised $11.5 million in Seed funding to advance its AI-powered software platform aimed at streamlining the selection and sale of construction products.

The funding round was led by Innovation Endeavors, with notable contributions from Building Ventures, Heartland Ventures, and Hometeam Ventures. The participation of prominent investors underscores the industry’s recognition of Parspec’s potential to innovate construction procurement.

Innovation Endeavors’ Josh Rapperport has joined Parspec’s board as a member, while Allen Preger from Building Ventures serves as a board observer. The influx of capital is earmarked for expanding operations and further developing Parspec’s technological infrastructure.

Parspec, under the leadership of CEO Forest Flager, stands out as a technology-focused company dedicated to simplifying the procurement process for construction materials, with a particular emphasis on lighting and electrical products. Leveraging artificial intelligence, Parspec’s platform facilitates product selection, quoting, and submittal preparation for sales agents and distributors.

The company’s initial focus is on catering to sales agencies and distributors in the lighting and electrical sectors. Presently, Parspec collaborates with three of the top ten lighting agencies and four of the five largest electrical distributors in the United States, including industry giants such as Sonepar, Graybar, Rexel, and CED.

Forest Flager commented on the significance of Parspec’s approach, stating, “To select products today, practitioners typically compare design specifications to technical product documentation hosted on thousands of manufacturer websites. It is a time-consuming and error-prone process that contributes to procurement costs in construction that are nearly double comparable industries.” He added, “Parspec uses AI to instantly identify spec-compliant products and associated documents, reducing labor by more than 50% compared to manual methods while improving compliance.”

The impact of Parspec’s innovative solution is already evident in the industry. Eli Basset, Manager at CED in San Francisco, affirmed, “With Parspec at our disposal, we’re more efficient than competitors doing it the old way. That means I can go out there and capture market share.” Clients report substantial benefits, including a 50% reduction in time to quote and prepare submittal documentation, enabling teams to bid on 5-15% more jobs. Moreover, customers have experienced a 2-5% increase in win rates by quoting products more likely to be accepted by their clients, leading to a significant boost in revenue and profitability.

Pratyush Havelia, Parspec’s CTO and co-founder, highlighted the company’s technological prowess, stating, “Recent advances in AI have enabled us to reinvent the product selection, quoting, and submittal process for our customers.” He elaborated on Parspec’s utilization of cutting-edge NLP & computer vision models, emphasizing the personalized product recommender system across a live database of over 2 million configurable product families.

“Parspec isn’t just another software solution,” remarked Netesh Gohil, Vice President of Operations at SESCO Lighting, Inc. “It’s critical to our business.” SESCO, the largest lighting sales agency in the United States, has been a Parspec customer since 2022, underscoring the platform’s significance in the industry.

Josh Rapperport, an investor at Innovation Endeavors, expressed enthusiasm for Parspec’s potential, stating, “Parspec is already improving the way construction interacts with its supply chain through its AI platform.” He emphasized the company’s unique ability to address entrenched problems using advanced machine learning techniques, signaling a promising future for supply chain efficiency and sustainability in the built environment.

In conclusion, Parspec’s successful fundraising round underscores the growing importance of AI-powered solutions in revolutionizing traditional industries. As the company continues to expand its footprint and refine its offerings, it is poised to play a pivotal role in reshaping the landscape of construction product procurement.

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