Parspec Announces $11.5M Seed Funding led by Innovation Endeavors, Bringing the Power of AI to Construction Product Procurement

Palo Alto, California, February 27,  2024 – Parspec, an AI-powered software platform that streamlines the selection and sale of construction products, today announced its oversubscribed $11.5 million seed round. Innovation Endeavors led the investment, with participation from Building Ventures, Heartland Ventures, and Hometeam Ventures. Innovation Endeavors’ Josh Rapperport joined Parspec’s board in connection with its investment.

Founded in 2021, Parspec is transforming the $1.7 trillion global construction materials market by providing better information and online workflow to support the procurement process. “Typical practice today is to manually compare design specifications to technical documentation hosted on thousands of manufacturer websites in order to identify suitable product options. It is a time consuming and error-prone process that contributes to procurement costs that are nearly double comparable industries such as auto parts and electronics,” said Parspec CEO and co-founder Forest Flager, who earned his Ph.D. at Stanford and previously led software at Katerra. “Parspec’s mission is to provide all stakeholders with better information to support the selection of cost-efficient and environmentally sustainable products, which is better for our industry and for the planet.”

Parspec is initially focused on serving sales agencies and distributors of lighting and electrical products. The company is currently working with three of the five largest lighting agencies and four of the five largest electrical distributors in the U.S., including Sonepar, Graybar, Rexel and CED. “With Parspec at our disposal we’re more efficient than competitors doing it the old way,” said Eli Basset, Manager at CED in San Francisco. “That means I can go out there and capture market share.” Benefits reported by Parspec customers include a 50% reduction in time to quote and prepare submittal documentation, enabling teams to bid 5-15% more jobs. In addition, customers have increased win rates 2-5% by quoting products their customers are more likely to accept. The overall business impact is a significant increase to both top line revenue and profitability.

“Recent advances in AI have enabled us to reinvent the product selection, quoting and submittal process for our customers,” said Pratyush Havelia, Parspec’s CTO and co-founder. “We utilize cutting-edge NLP & computer vision models to enable contextual, hybrid and image-based searches, LLM-based document summarization, and a personalized product recommender system across a live database of over 2 million configurable product families that is growing daily.”

“Parspec isn’t just another software solution,” said Netesh Gohil, Vice President of Operations at SESCO Lighting, Inc. “It’s critical to our business.” SESCO has been a Parspec customer since 2022.

“Parspec is already improving the way construction interacts with its supply chain through its AI platform,” said Josh Rapperport, Investor at Innovation Endeavors. “The team is uniquely suited to collaborate with the industry to solve entrenched problems using advanced deep neural networks based on LLM’s and multi-modal models. We couldn’t be more excited to support them as they improve supply chain efficiency — and the sustainability of the built environment.”

ABOUT PARSPEC

Parspec is a technology company focused on streamlining the procurement process for construction materials, starting with lighting and electrical products. Founded in 2021 and headquartered in San Mateo, California, Parspec’s AI-powered platform supports product selection, quoting, and submittal preparation for sales agents and distributors. The company is backed by leading deep tech and construction technology venture investors, including Innovation EndeavorsBuilding VenturesHeartland VC, and Hometeam Ventures.

For more information, visit https://parspec.io/