Levelpath, the Next-Generation Procurement Platform, Raises $55 Million in Funding

Levelpath, a procurement software startup co-founded by the individuals behind Scout RFP, has raised $55 million in Series B funding led by Battery Ventures, as the company seeks to quadruple its revenue this year.

This funding round also welcomed investments from existing backers like Benchmark, which spearheaded Levelpath’s initial $14.5 million seed round, and Redpoint, the main investor in the $30 million Series A round announced in 2023.

The startup was established by Stan Garber and Alex Yakubovich (shown right), whose earlier company, Scout RFP, was acquired by Workday for $540 million in 2019. During their time at Workday, Yakubovich and Garber identified persistent procurement challenges that inspired them to develop a mobile-first, user-centric platform.

The timing of Levelpath’s launch was advantageous; debuting alongside ChatGPT has empowered the startup to integrate AI capabilities from its inception. This includes the analysis of unstructured contract data and recommendations for more cost-effective alternative products and services. The company currently caters to clients such as Ace Hardware, Amgen, Coupang, and SiriusXM.

This investment underscores confidence in Levelpath’s swift expansion and its ability to contend with a market historically dominated by traditional players. The procurement software sector has often been reliant on outdated vendors like Coupa and Ariba, whose cumbersome systems frequently compel employees to sidestep official procedures. This “rogue” spending through corporate credit cards can lead to overspending and missed opportunities for bulk discounts, as pointed out by Battery Ventures general partner Neeraj Agrawal.

Procurement represents the second-largest expense for companies, following payroll, making software improvements particularly beneficial. The procurement software industry was valued at $7.3 billion annually in 2023, according to Fortune Business Insights.

Although Levelpath is a newer and likely smaller competitor compared to its major rivals — including Zip, valued at $2.2 billion last fall, and Oro Labs, backed by Felicis — the company appears to possess the essential elements for success, including Agrawal, who led Battery’s Series B investment in Coupa and has joined Levelpath’s board.

Coupa has transformed into one of the most significant procurement firms of its era. It went public in 2016 and, eight years later, was acquired by private equity firm Thoma Bravo for $8 billion.

Agrawal, who is well-versed in the nuances of building a successful business in this domain, conveyed admiration for Levelpath’s technology and its founders. “They have an excellent reputation for delivering products, being great collaborators, and fulfilling their commitments,” Agrawal stated to TechCrunch. “Customers are eager to partner with them and help shape this next-generation product.”

Yakubovich and Garber have been friends since their high school years in Ohio, connected by their shared background as immigrants from the former Soviet Union and a mutual enthusiasm for entrepreneurship. They have worked together for over 20 years, with the clear aim of transforming procurement software into a more enjoyable experience for customers rather than a cumbersome task.

While procurement may seem like a mundane business operation, it offers a direct and significant return on investment by enabling companies to achieve cost savings.

“It drives the cash register due to these savings,” Agrawal remarked.