Next-gen procurement platform Levelpath nabs $55M

Levelpath, a burgeoning procurement software company established by the founders of Scout RFP, has successfully raised $55 million in Series B funding, spearheaded by Battery Ventures. This financial boost aims to significantly enhance the company’s revenue, with ambitions to quadruple it within the year. The funding round also included contributions from notable existing investors such as Benchmark, which previously led Levelpath’s $14.5 million seed funding, and Redpoint, who was at the forefront of the company's $30 million Series A round disclosed earlier this year. Founded by Stan Garber and Alex Yakubovich, both of whom previously sold Scout RFP to Workday for a remarkable $540 million in 2019, Levelpath was born out of insights gained during their tenure at Workday, where they recognized ongoing procurement issues that needed addressing. The startup’s launch coincided with the emergence of ChatGPT, allowing Levelpath to embed AI features from the outset. These capabilities include analyzing unstructured contract data and suggesting more affordable alternatives for products and services. Its client roster now boasts big names like Ace Hardware, Amgen, Coupang, and SiriusXM, highlighting the growing trust in Levelpath’s innovative approach. This recent investment underscores confidence in Levelpath's rapid expansion and its potential to shake up a sector traditionally dominated by legacy firms. Long-standing procurement software providers like Coupa and Ariba have often struggled with outdated systems, which can lead to 'rogue' spending as employees bypass official channels. Such practices not only inflate costs but also result in missed opportunities for bulk discounts, as noted by Neeraj Agarwal, a general partner at Battery Ventures. Procurement remains a critical area of expenditure for companies, ranking just behind payroll, and improvements in software can yield significant savings. The procurement software market was valued at $7.3 billion in 2023, according to Fortune Business Insights. While Levelpath may be a newer entity compared to rivals like Zip and Oro Labs, it possesses the essential elements for success, including the insights of Agarwal, who has joined Levelpath’s board after leading Battery's investment in Coupa. Agarwal's experience in growing successful procurement businesses aligns well with his admiration for Levelpath’s technology and leadership. He remarked on the founders' strong reputation for delivering quality products and maintaining collaborative relationships with customers. Friends since high school, Yakubovich and Garber share a deep-rooted connection, having bonded over their immigrant backgrounds from the former Soviet Union and their entrepreneurial spirit. With over two decades of collaboration behind them, their vision is to transform procurement software into a tool customers prefer to use rather than avoid. Despite its seemingly mundane nature, procurement offers a substantial return on investment, making it a vital function for companies looking to enhance their financial efficiency.