In 2014, Stan Garber and Alex Yakubovich set out to reinvent the request for proposal (RFP) process by launching Scout RFP, 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 remain in Workday’s management following the purchase. But while on the job, the pair faced major challenges with buying the business.
“After Workday got the Scout RFP, we started to feel the pain every day — chasing down the right person to approve the happy hour budget, which vendors we could buy swag from, or even trying to get NDAs signed,” Yakubovich told TechCrunch via email. . “Then, of course, there are endless emails and slacks related to these various activities. The time-consuming nature of the tasks hindered the completion of our work and we realized how much data was locked away and caused time inefficiencies throughout the organization.”
These blockers led Garber and Yakubovich to found LevelPath, a software-as-a-service platform for managing various enterprise procurement services. In a clear sign that it’s on the right track (no pun intended), LevelPath today announced that it has raised $30 million in a Series A round led by Redpoint, with participation from Menlo Ventures, which was led by an undisclosed $14.5 million seed round. The participation of New View Capital and World Innovation Lab brought Benchmark and the startup’s total funding to $44.5 million.
It’s no secret that enterprises struggle with procurement. According to a 2020 Harvard Business Review study, approximately 60% of business leaders say a lack of transparency in their finance and procurement functions represents a threat to their business. Data quality and governance are frequently cited as the biggest hurdles for procurement teams, which often struggle to gain visibility into the procurement process.
“Companies are looking to save money and focus more on the procurement process,” Yakubovich, who serves as LevelPath’s CEO, told TechCrunch. “It’s our hypothesis that creating an enjoyable experience will drive adoption and, in turn, drive company-wide efficiency and immediate return on investment.”
Now, it should be noted that many startups are capturing the market for procurement software, which Fortune Business Insights has pegged at $6.15 billion in 2021.
Zip is one of the bigger players in this space, having recently raised $100 million at a $1.5 billion valuation. The fintech startup ramp expanded into acquisitions just a few months ago. And then there are the smaller-time, more specialized vendors like Focal Point, Kielwar and Tropic.
So what makes LevelPath different?
Yakubovich claims this is the platform’s mobile-first (yes, really) interface, which he describes as “next-gen” and “easy-to-use.” So Levelpath can do While it can be used by smaller companies, Yakubovich says, it’s meant for enterprises managing hundreds or thousands of vendors and employees — offering customized tools for each company’s approval workflow.
“Often, a simple purchase like buying a software seat turns into an endless trail of requests, phone calls and emails – trying to get approval from all the right people,” Yakubovich said. “For example, let’s say a marketing executive is buying swag for an event. In that case, their company may have a filter that flags more than 5,000 purchases to department heads for approval. If this person’s purchase is only 3,000, they can go to their list of approved sellers and start placing orders. Or, if they are signing a sponsorship agreement, it can connect this person with their department head and legal team to complete their specific approval process … Levelpath forwards their responses to the appropriate procurement leaders.”
According to Yakubovich, AI also plays a different role. Algorithms built into the LevelPath platform provide “actionable insights” to reduce instances of vendor redundancy. And LevelPath is building an AI model that understands Adjusts purchasing and workflow habits of employees and purchasing experience based on that. For example, if someone in an organization wants to buy software, Levelpath will run through the enrichment data and inform the user about software vendors that offer similar, potentially cheaper products that meet their specific criteria.
The goal, Yakubovich says, is to help companies decide where to consolidate and restructure their services. “We are the first platform to build with the end-user experience as the guiding light for our entire product roadmap,” he added. “Our goal is to make shopping a pleasure.”
It is an ambitious mission. But LevelPath claims it already has dozens of enterprise customers, including Ace Hardware, Qualtrics and InnovaCare.
With 26 employees — a number Yakubovich expects to double next year — LevelPath plans to launch a comprehensive go-to-market strategy in 2024 while leveraging the latest funding for product development and research.
“Companies are looking to save money and focus more on the procurement process,” Yakubovich said. “There has never been a better time to invest in this space.”