SAN MATEO — Parspec, an AI-native software platform that enables wholesale distributors and sales agents to efficiently bid and supply construction products, has raised $20 million in Series A funding. The round was led by Threshold Ventures (formerly DFJ), with participation from existing venture investors including Innovation Endeavors, Building Ventures, Heartland Ventures, and Hometeam Ventures.
The global construction industry represented a $16 trillion market in 2024, with over $5 trillion flowing through the materials supply chain. Despite this scale, much of the industry still relies on outdated procurement processes managed through email and phone. These methods are time consuming and error prone, resulting in labor costs that are double comparable industries such as auto parts and electronics.
Parspec’s customers consistently report 50-100% improvement in labor productivity, while simultaneously improving bid quality and compliance. “With Parspec, we’ve been able to significantly reduce quote and submittal turnaround times.” said Rama Theekshidar, Chief Digital Officer at U.S. Electrical Services Inc. “This efficiency empowers our team to pursue and win more projects—fueling profitable growth across the business. The team at Parspec are true thought leaders, consistently pushing the boundaries of what’s possible in our industry, and we are proud to partner with them.”
A key differentiator for Parspec is their ability to instantly identify products available in the market that satisfy complex specifications provided by the customer. To do so, Parspec has developed cutting-edge multimodal AI models which extract these requirements from design drawings and specification documents. Next, a ranked set of compliant products are surfaced to the user from a database of over 6 million products. To ensure Parspec’s product catalog is current and comprehensive, they have developed an automated data pipeline which extracts and organizes product information from thousands of manufacturer websites on a daily basis.
“Forest, Pratyush and the Parspec team are tackling one of the largest opportunities in the construction industry,” said Mo Islam, Partner at Threshold Ventures. “They have developed an AI-native product to automate construction materials procurement, unlocking massive value for their customers.”
“We’re excited to partner with Threshold to accelerate our mission to enable a more connected and efficient construction supply chain,” stated Forest Flager, Cofounder and CEO of Parspec. “With this new funding, and in close collaboration with our existing customers, Parspec plans to expand our platform to support the full order lifecycle and to create a unified digital environment for collaboration between contractors, distributors, sales agents and manufacturers.”
