Your humble editor sat down with Forest Flager, CEO and co-founder of Parspec, as he shared insights into the company’s remarkable achievement of securing an oversubscribed $11.5 million seed funding round led by Innovation Endeavors. Parspec, which specializes in AI-powered software for the construction industry, is on a mission to transform the cumbersome and error-prone product procurement process into an efficient, digital workflow.
“We secured some traction with our customer base, with our initial product offering, which was focused on submittals,” Flager said, explaining the company’s early success. Beginning in early 2024, Parspec expanded their line to “inform product selection and quoting for our customers,” a move that garnered significant investor interest and led to the oversubscription of their funding round.
Parspec has made an impact by enabling a 50% reduction in time to quote and prepare submittal documentation, which has resulted in increased job bids and win rates for its clients. Flager explained that are working with very large electrical distributors including Sonepar, Graybar, Rexel, and CED just to name a few. They are also working with several rep firms including SESCO.
Parspec’s funding success is noteworthy, given the calibre of investors they’ve attracted, such as Innovation Endeavors, known for backing major names like Uber and SoFi. “We’re fortunate to have Innovation Endeavors,” Flager commented. “They’re a great deep tech investor… very helpful in helping us build the right team and a really differentiated product in the market.”
Josh Rapperport of Innovation Endeavors has joined Parspec’s board, signifying a strong vote of confidence in the company’s direction and leadership. The press release echoes this sentiment, highlighting the advanced deep neural networks and multi-modal models that are being developed to improve supply chain efficiency and sustainability.
As for the company’s approach to the market, Flager explained their customer-centric subscription model, which is based on usage rather than a traditional seat-based model. “It’s a subscription model based on usage… customers consume those credits depending on the type of documents they’re creating,” he stated. This approach allows for a more equitable and flexible pricing structure for their diverse client base.
While Parspec is currently focused on lighting and electrical sectors, Flager did not dismiss the possibility of expanding beyond these areas in the future. He emphasized the recent launch of their product selection and quoting platform as their immediate focus, indicating a period of consolidation and deepening of their services within the existing market.
In closing, Flager expressed a strong commitment to the industry: “Just excited to work with this industry… we hope that can essentially help our lighting agent and distributor businesses really reduce time to quote and prepare submittals, and that’s going to enable them to bid and win more jobs.”
Parspec, founded in 2021, has quickly established itself as a pioneering force in the $1.7 trillion global construction materials market. With its AI-powered platform, Parspec is set to facilitate a more cost-efficient and environmentally sustainable selection of construction products, a benefit that Forest Flager firmly believes is “better for our industry and for the planet.”