Levelpath Secures $55M in Funding - Next-Gen Procurement Platform

Levelpath Secures $55 Million in Series B Funding

Levelpath, a relatively new company specializing in procurement software, has successfully raised $55 million in a Series B funding round. This investment was spearheaded by Battery Ventures as the company aims to achieve a fourfold increase in revenue throughout the current year.

Investor Participation

Existing investors also contributed to this funding round. These include Benchmark, who previously led Levelpath’s $14.5 million seed funding, and Redpoint, the primary investor in the $30 million Series A round announced in 2023.

Founders' Proven Track Record

The company was established by Stan Garber and Alex Yakubovich. Previously, they founded Scout RFP, which was acquired by Workday in 2019 for $540 million. Their experience at Workday revealed ongoing difficulties within the procurement process, inspiring them to create a mobile-focused, intuitive platform.

Leveraging AI from the Start

Levelpath’s launch coincided with the debut of ChatGPT, allowing for the integration of artificial intelligence capabilities from the outset. The platform utilizes AI to analyze unstructured data within contracts and suggest more cost-effective alternatives for products and services.

Growing Customer Base

Currently, Levelpath serves a diverse range of clients, including Ace Hardware, Amgen, Coupang, and SiriusXM.

Disrupting a Mature Market

This investment demonstrates confidence in Levelpath’s rapid expansion and its potential to challenge established companies in the procurement software market. Traditional vendors like Coupa and Ariba are often criticized for their complex systems, which can lead employees to circumvent established procedures.

The Importance of Procurement Spend

According to Battery Ventures general partner Neeraj Agrawal, this practice of “rogue” spending via corporate cards often results in overspending and lost opportunities for volume discounts. Procurement represents a company’s second-largest expense, following payroll, making software improvements highly impactful.

Market Size and Potential

The global procurement software market was estimated at $7.3 billion in 2023, as reported by Fortune Business Insights.

Competitive Landscape

While Levelpath is a newer entrant compared to competitors like Zip (valued at $2.2 billion) and Oro Labs, it possesses key advantages. Notably, Neeraj Agrawal, who previously led Battery’s Series B investment in Coupa, has joined Levelpath’s board.

Coupa's Success Story

Coupa experienced significant growth, including a successful IPO in 2016 and a subsequent acquisition by Thoma Bravo for $8 billion.

Agrawal's Confidence in Levelpath

Agrawal expressed his admiration for Levelpath’s technology and its founding team. He stated that the company has a strong reputation for delivering on its promises and fostering positive working relationships with its customers. He emphasized that clients actively seek to collaborate with Levelpath in developing the next generation of procurement solutions.

A Long-Standing Partnership

Yakubovich and Garber have maintained a friendship since high school in Ohio, united by their shared immigrant backgrounds from the former Soviet Union and a common passion for entrepreneurship. They have collaborated for over two decades, with a shared objective of making procurement software a more enjoyable experience for users.

Procurement as a Value Driver

Despite its often-overlooked nature, procurement offers a substantial and direct return on investment by enabling companies to reduce costs.

Direct Impact on Profitability

As Agrawal succinctly put it, “It makes the cash register ring because of these savings.”