LevelPath, a procurement software startup founded by the duo behind Scout RFP, has raised $55 million in Series B funding led by battery ventures to quadruple revenue this year.
The funding round also included participation from existing investors, including the benchmark that led the Level Pass $14.5 million seed round, as well as Redpoint, the lead investor in the $30 million Series A round announced in 2023.
The startup was founded by Stan Garber and Alex Yakubovich (pictured right). His previous startup, Scout RFP, was acquired by Workday in 2019 for $540 million. Yakubovich and Garber spent three years working hours.
The timing of the level pass was proven by chance. With CHATGPT rising to its debut, startups can now integrate AI capabilities from the startup. This includes reviews of unstructured data in the contract and recommendations for cheaper, similar products and services. The company currently counts ACE hardware, Amgen, Coupang and SiriusXM as its customers.
This investment shows confidence in LevelPath’s rapid growth and the potential to disrupt the market dominated by legacy players. Procurement software has long been managed by outdated vendors like Coupa and Ariba. According to Neeraj Agrawal, general partner at Battery Ventures, this “Rogue” spending using corporate credit cards often missed out on overexpenditures and opportunities for bulk discounts.
In fact, procurement represents the second-largest spending of a company after payroll, and software improvements are especially valuable. According to Fortune Business Insights, the procurement software market was valued at $7.3 billion per year in 2023.
Although LevelPath is a newer and perhaps smaller player compared to its major competitors, including ZIP, worth $2.2 billion last fall, and its major competitors, including Felicys-backed Oro Labs, the company seems to have all the right factors, including Agrawal, who led its battery Series B investment into Coupa and joined the LevelPath board.
Of course, Coupa has grown into one of the most successful sourcing companies of the era. The IPO was successful in 2016, and a few years later, PE company Thoma Bravo went private for $8 billion.
Understanding what it takes to build a large company in this category, Agrawal is equally impressed with LevelPas technology and its founder. “They have a strong reputation for being good people to provide products and work with and doing what they say they’re trying to do,” Agrawal told TechCrunch. “Customers want to work with them to help them build this next-generation product.”
Jakubovich and Gerber have been friends since attending high school in Ohio. They united a shared heritage as immigrants from the former Soviet Union and as mutual interest in entrepreneurship. The pair have been working together for over 20 years, and their stated goal is to help customers enjoy it, rather than using procurement software.
While sourcing may seem like a common business function, it offers a direct, important benefit to your investment by helping businesses save money.
“We’ll make cash register rings to save these,” Agrawal said.
