In 2014, Stan Garber and Alex Jakubowicz set out to reinvent the Request for Proposal (RFP) process by launching Scout RFP, which provides a cloud-based sourcing solution designed to help organizations source faster—and, ideally, easier. Workday acquired Scout RFP in 2019, and Garber and Yakubovich decided to remain under Workday management after the purchase. But while at Workday, the couple faced significant challenges in business procurement.
“After Workday acquired the Scout RFP, we started facing everyday pain points — chasing the right person to approve the happy hour budget, finding vendors we could buy swag from or even getting an NDA to sign,” Jakubovich told TechCruch via email. “Then, of course, there are the endless emails and Slacks associated with these various activities. The time-consuming nature of the tasks created barriers to getting our work done, and we realized the amount of data that was being stored and the time inefficiencies it was causing throughout the organization.
These barriers prompted Garber and Jacobovich to found it Level path, a software-as-a-service platform for managing various enterprise procurement services. In a clear sign that they’re on the right track (no pun intended), Levelpath announced today that it has raised $30 million in a Series A round led by Redpoint with participation from Menlo Ventures, which follows an undisclosed $14.5 million seed round led by Redpoint. Benchmark, with participation from NewView Capital and World Innovation Lab, brings the startup’s total amount to $44.5 million.
It’s no secret that businesses struggle to buy. According to Harvard Business Review Stady As of 2020, nearly 60% of business leaders say a lack of transparency between their finance and procurement functions is a risk to their business. Data quality and governance are often Quote As the biggest obstacle for procurement teams, who often struggle to have a clear vision of procurement processes.
“Companies are looking to save money and focus more on the procurement process,” Jakubowicz, who serves as CEO of Levelpath, told TechCrunch. “Our hypothesis is that creating an enjoyable experience will help maximize adoption and, in turn, company-wide efficiencies and immediate return on investment.”
Now, it is worth noting that many startups are seeking to monopolize the procurement software market, as indicated by Fortune Business Insights magazine. value Worth $6.15 billion in 2021.
Zip is one of the largest companies in the sector, recently raising $100 million at a $1.5 billion valuation. Fintech startup Ramp expanded into the procurement space just a few months ago. Then there are smaller, more specialized vendors like Focal Point, Keelvar, and Tropic.
So what sets Levelpath apart?
Jakubovich claims it’s a mobile-first (yes, really) interface for the platform, which he describes somewhat subjectively as “next-gen” and “user-friendly.” While Levelpath Can It can be used by small businesses, and is intended for organizations that manage hundreds or thousands of vendors and employees — offering customized approval workflow tools for each company, says Jakubovich.
Levelpath’s mobile-centric purchasing management interface.
“Often, what seems like a simple purchase request, such as purchasing a software seat, turns into an endless series of phone calls and emails — trying to get approval from all the right people,” Jakubowicz said. “For example, let’s say a marketing executive is purchasing swag for an event. In this case, the filter their company might use is one who refers any purchases over $5,000 to the department head for approval. If that person’s purchases are only $3,000 , they can proceed to their list of approved suppliers and initiate the order. Or, if they are signing a sponsorship contract, they may connect this person with their department head and legal team to complete their specific approval process… Levelpath funnels their responses to the appropriate procurement leaders.
Artificial intelligence also plays a unique role, according to Jakubovich. The algorithms built into the Levelpath platform provide “actionable insights” to reduce instances of vendor duplication. Levelpath builds an AI model that understands… Monitor the purchasing habits and workflow of employees and adjust the purchasing experience accordingly. For example, if someone in an organization wants to purchase software, Levelpath will work through the enrichment data and let the user see which software vendors offer similar and perhaps cheaper products that meet their typical criteria.
The goal, Jakubowicz says, is to help companies decide where to consolidate and restructure their services. “We are the first platform to be built with end-user experience as the guiding light for our entire product roadmap,” he added. “Our mission is to make the buying process fun.”
This is an ambitious task. But Levelpath claims it has dozens of enterprise customers already, including Ace Hardware, Qualtrics and Innovacare.
With a staff of 26 employees – a number that Jakubowicz expects to double in the next year – Levelpath plans to initiate a broader go-to-market strategy in 2024 with the final funding tranche directed toward product development and research.
“Companies are looking to save money and focus more on the purchasing process,” Jakubowicz said. “It has never been a better time to invest in this area.”